Life comes back full circle for RIL stock in Navratri 2024; here's how

Reliance Industries stock traded below the 200-DMA in Navratri 2023, and has now once again slipped below the key long-term moving average after almost a year. Check key support levels for RIL here.

Shares of Reliance Industries have declined as much as 7.3 per cent in the last three trading sessions amid the on-going stock market correction. In trades on Thursday, Reliance (RIL) stock had touched an intra-day low of Rs 2,827 on the National Stock Exchange (NSE) and was down 3.4 per cent as of 1.30 PM.

The Mukesh Ambani-led firm is one of the most valued listed companies in India with a market capitalisation of Rs 19.29 lakh crore. The free float market-cap of RIL stands around Rs 9.64 lakh crore.

RIL stock journey from Navratri 2023 - 2034

In the process, life has come back in full circle for RIL this Navratri, as the stock has dipped back below its long-term 200-DMA (daily moving average), which now stands at Rs 2,902. Interestingly, it was around Navratri 2023, when the stock bottomed-out at Rs 2,220 on October 26, 2023; below the then 200-DMA. 

Technical chart shows that RIL stock spent hardly four trading sessions below the 200-DMA, and soon bounced back above it on October 30, 2023. Post which, the stock witnessed a solid rally of 35.3 per cent as the stock registered a fresh life-time high at Rs 3,218 on July 08, 2024.

When compared to its high, the stock at present has declined 12.1 per cent from its peak.


 

Early Diwali? Reliance 1:1 bonus issue

Last month, the company's board on September 05 approved bonus issue of equity shares in the 1:1 ratio; meaning 1 free share for every shareholder holding 1 equity share as of record date.

This will be RIL's first bonus issue in the last seven years, and overall the sixth bonus share issue till date.

RIL's chairman and managing director Mukesh Ambani said the issuance and listing of bonus shares will coincide with the upcoming festive season in India and will be an early Diwali gift to the company's shareholders.

Today, we have entered the festive season with the start of Navratri 2024. The festival of Diwali falls on November 01; hence there is high anticipation among market participants of RIL announcing the record date for bonus shares sometime soon.

Brokerages upbeat on RIL

Both foreign and domestic brokerages have a positive outlook on Reliance Industries. According to reports, CLSA has maintained an Óutperform'rating on RIL with a target price of Rs 3,300.

Nomura has a 'Buy' call with a target price of Rs 3,600; Bernstein had raised RIL's target price to Rs 3,440 per share.

In March 2024, Goldman Sachs had raised its bull case scenario on RIL stock with a target price of Rs 4,495. The stock at present trades below Goldman's base case scenario price of Rs 3,400.

Domestic brokerage firm - Motilal Oswal too has a buy rating on RIL with a target price of Rs 3,435 per share.

Here's what the RIL chart suggests:

Reliance Industries

Current Price: Rs 2,830

Bias: Negative

Support: Rs 2,830; Rs 2,737; Rs 2,644

Resistance: Rs 2,865; Rs 2902; Rs 3,000

RIL stock is not only trading below the 200-DMA, but also significantly below the lower-end of the Bollinger Bands on the daily scale; which is a bearish sign. Chart suggests that the near-term bias shall remain negative as long as the stock trades below Rs 2,865 levels. CLICK HERE FOR THE CHART

At present, the stock seems to be testing support around its 50-WMA (Weekly Moving Average), which stands at Rs 2,830. Break and sustained trade below the same can trigger a fall towards the super trend line support on the weekly chart at Rs 2,737. The next key support stands at Rs 2,644 - RIL's 20-MMA (Monthly Moving Average).

For the bias to turn favourable, RIL will need to sustain above the lower-end of the Bollinger Bands, and then cross the 200-DMA (Rs 2,902). Post which, the stock can potentially bounce back to Rs 3,000-mark. The bias will turn favourable only on sustained trade above Rs 3,000.