Technical Stock Pick: Why investors can go long on RIL post recent dip, Shilpa Rout explains

The S&P BSE Sensex stock hit a record high of Rs 3024.80 on 4th March 2024, but it failed to hold on to the momentum. It witnessed a steady decline which took the stock towards its 50-DMA on the daily charts.

The stock fell nearly 5% from its March 2024 high to take support above 2800 levels. Now, a close above 3000 levels could take the stock to fresh record highs, options data suggests.

In terms of price action, the stock is below 10,20 and 30-DMA but above 5,100 and 200-DMA on the daily charts.

The Supertrend indicator has given a bearish signal on the daily charts, but if stocks stay above 2750-2800 levels, bulls should be able to make a comeback.

The daily Relative Strength Index (RSI) is placed at 48.1. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed.

“On the daily chart, RIL has witnessed a small correction from a 52-week high of 3025 levels and has taken support near the 2800 level to indicate a reversal with a positive candle pattern,” Shilpa Rout, AVP - Derivatives Research, Prabhudas Lilladher, said.

“Reliance Industries futures saw a long buildup and traded above the VWAP level of 2912 in the futures,” she said.

“Options Chain suggests 3000 CE writers have the highest OI and are aggressively active, with more than 5 lakh OI and 2800 PE writers holding maximum exposure for this series,” highlights Rout.

“With the support of 2750, one can go long in this counter for an upside target of 3300,” she recommends.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)