Potential Bullish Breakout in Reliance Industries
Summary: The chart analysis for Reliance Industries Ltd. (NSE: RELIANCE) indicates the formation of an Inverse Head and Shoulders pattern, which is a classic bullish reversal signal. The stock is currently trading around ₹3,024.55 and appears to be testing a crucial resistance level.
Key Observations:
Inverse Head and Shoulders Pattern:
Left Shoulder: Formed around late May to early June.
Head: The low in mid-July.
Right Shoulder: Developed by late August.
This pattern suggests that the previous downtrend may be reversing, signaling a potential upward movement.
Neckline Resistance:
The neckline of this pattern is observed around ₹3,150.05.
A breakout above this level with significant volume could confirm the bullish trend, potentially pushing the stock towards higher levels.
Target Price:
Based on the height of the pattern, the projected target price post-breakout could be approximately ₹3,278.60, reflecting a gain of around 4.4% from the current price.
Volume Analysis:
Noticeable volume spikes accompany the recent price action, especially as the right shoulder forms, suggesting increasing buying interest.
Moving Averages:
The stock is currently trading above the 20-day, 50-day, and 100-day EMA, reinforcing the bullish sentiment.
The 200-day EMA is below the current price, which acts as a strong support.
RSI (Relative Strength Index):
The RSI is hovering around 54.04, indicating neither overbought nor oversold conditions. This neutral RSI provides ample room for upward momentum if the breakout occurs.
Conclusion:
Investors should watch for a decisive breakout above the ₹3,150 level. If the stock breaches this resistance with strong volume, it could signal a continuation of the uptrend towards the target price of ₹3,278.60. However, failure to break the neckline could see the stock retracing to lower support levels.
Note: Always consider the broader market context and your risk tolerance before making any trading decisions. Happy trading!
Key Observations:
Inverse Head and Shoulders Pattern:
Left Shoulder: Formed around late May to early June.
Head: The low in mid-July.
Right Shoulder: Developed by late August.
This pattern suggests that the previous downtrend may be reversing, signaling a potential upward movement.
Neckline Resistance:
The neckline of this pattern is observed around ₹3,150.05.
A breakout above this level with significant volume could confirm the bullish trend, potentially pushing the stock towards higher levels.
Target Price:
Based on the height of the pattern, the projected target price post-breakout could be approximately ₹3,278.60, reflecting a gain of around 4.4% from the current price.
Volume Analysis:
Noticeable volume spikes accompany the recent price action, especially as the right shoulder forms, suggesting increasing buying interest.
Moving Averages:
The stock is currently trading above the 20-day, 50-day, and 100-day EMA, reinforcing the bullish sentiment.
The 200-day EMA is below the current price, which acts as a strong support.
RSI (Relative Strength Index):
The RSI is hovering around 54.04, indicating neither overbought nor oversold conditions. This neutral RSI provides ample room for upward momentum if the breakout occurs.
Conclusion:
Investors should watch for a decisive breakout above the ₹3,150 level. If the stock breaches this resistance with strong volume, it could signal a continuation of the uptrend towards the target price of ₹3,278.60. However, failure to break the neckline could see the stock retracing to lower support levels.
Note: Always consider the broader market context and your risk tolerance before making any trading decisions. Happy trading!
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.