RIL stock sees 'Death Cross' on charts just days ahead of bonus record date

Reliance could seek support around its 100-WMA in the run-up to the bonus record date; Whereas, PNC Infratech too has witnessed a 'Death Cross' and could slide another 21% from here on.

Reliance Industries (RIL) and PNC Infratech are the two stocks to witness a 'Death Cross' on the daily charts on Tuesday. Technically, 'Death Cross' is a chart pattern that indicates a significant change in trend - i.e. from a bullish set-up to a bearish trend.

Technically, the term 'Death Cross' is used when the stock or underlying index 50-DMA (Daily Moving Average) drops below the long-term 200-DMA. Thus, implying that the short-term trend for the stock is likely to be weaker and that price may trend downward.

Here's what the charts suggest for Reliance Industries stock and PNC Infratech:

Reliance (RIL)

 

Current Price: Rs 2,701

Downside Risk: 4.9%

Support: Rs 2,675; Rs 2,640

Resistance: Rs 2,814; Rs 2,855

RIL stock is just 4 trading sessions away from turning ex-bonus. Reliance Industries has announced October 28 as the record date for determining eligible shareholders for the upcoming 1:1 bonus share issue. 

On the bourses, RIL stock has witnessed steady losses over the last one month, despite the company announcing a liberal 1:1 bonus issue. The stock has shed 12 per cent from its high of Rs 3,067 on September 27, and now trades below its all key short-term moving averages on the daily scale. CLICK HERE FOR THE CHART

Today, the daily chart witnessed formation of 'Death Cross' as the 50-DMA at Rs 2,913 slipped below the 200-DMA of Rs 2,914. Last week, RIL stock had also given a downside breakout on the weekly scale. Chart suggests the stock could seek support around its 100-WMA (Weekly Moving Average), which stands at Rs 2,570 levels. 

Interim support for the stock can be expected around the recent lows around Rs 2,675; which is very close to the 20-MMA (Monthly Moving Average) at Rs 2,640. In case of an upside, the 20-DMA at Rs 2,814 followed by the super trend line at Rs 2,855 are likely to act as key hurdles in the very near-term.

PNC Infratech

Current Price: Rs 342

Downside Risk: 21.6%

Support: Rs 320; Rs 309

Resistance: Rs 373

PNC Infratech stock has witnessed a sharp 35 per cent fall in the last two trading sessions. Apart from the 'Death Cross' pattern, the stock is also seen trading below the lower-end of the Bollinger Bands on the daily scale. Thus, the near-term bias is likely to remain fairly bearish as long as the stock trades below Rs 373. CLICK HERE FOR THE CHART

On the downside, the stock seems to be seeking support around its 200-WMA - a key moving average the stock has not violated since August 2020. The 200-WMA stands at Rs 320, while the 50-MMA (Monthly Moving Average) support stands at Rs 309. The stock may look to consolidate as long as these two supports are held. On the downside, a dip to Rs 268 cannot be ruled out.