Wednesday, July 7, 2010

Reliance Analysis dated 6th Jul 2010

RIL completed it wave 1 down move [depicted in yellow font orange box] on an open low of Rs. 976 on 30th June. From that point Reliance has moved up in a flat formation 3-3-5 depicted in blue font a-b-c, ending at 30 Jun high of Rs. 1093. The rise of wave c od wave wave 2 has been a rather a Rising Diagonal type structure, a  break of line connect TL 1 shall be majorly bearish for reliance. The monthly pivot for reliance is at 1056, a rather strong support. The 34 EMA is at Rs. 1054. The bottom supports are in place. I expect a break of TL 1, which shall trigger a wave 3 for reliance, with a target of approximately Rs. 825.

Further the ATR is a lowest from Jan 2010, which also signals an change in trend is possible. Generally a lower ATR is accompanied by a change in trend, as it marks an exhaustion of currrent trend. The current ATR(14) is 23.

EOD Chart of Reliance:

Trade Strategy for RIL: A break of 1059 on EOD could be used to Short with a Stop loss of 1105 (earlier was wrong). This shall be an EOD based strategy. Upside potential is limited for Reliance, however, a break above today's high of 1081 shall be bullish, but i expect a target of only 1100 odd on RIL which shall be converging point for trendline joining (i) and (iii). Also, wave (iv) of wave 1 down is at 1100 which is rather huge resistance for upside move.

Refer Disclaimer in previous post...


Veng said...

Can you please correct the RIL SL figure? There seems to be a typo.

Vivek Marne said...

@veng: thanks for the information, I have corrected the blog, by mistake i made by mistake deducted 1.5x ATR from the price.