Buy Reliance Industries Ltd:: Edelweiss

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Reliance Industries Ltd, has been one of the favorites of Mutual Funds, HNI and retail clients for investments. The company which has proven that it’s the best since decades; had some hard time in the last six years as far as stock price is concerned. The price made its life time high of Rs.1649 in the begining of 2008 but disappointed investors as it collapsed by 71% to Rs.461 in 2008 equity debacle. The stock price since then traded in a symmetrical triangle formation. The prices recently took support at the trendline of triangle at Rs.831 and bounced expediently. The stochastics indicator on monthly compression has given a positive crossover, more importantly it has formed a higher high from the support level garnering solid evidence of a reversal.

On daily charts, the price had broken out of inverted or bullish head and shoulders pattern. The inverted head and shoulder is a bullish reversal pattern confirmed with the breakout of neckline; in this case, the neckline was at Rs.912 which was re-tested and afterwards the prices rallied, strenghtening the breakout. The histogram and averages on MACD are showing bullish trend supporting our bullish stance.

LINK
https://www.edelweiss.in/research/Udaan--Buy-Reliance-Industries-Ltd/10005541.html