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The savage cut received by RIL on Wednesday has resulted in an evening star pattern in the weekly chart. The stock reversed from the 50-day moving average line at Rs 1,750 last week but the gravestone doji made on Friday indicates lack of strength in the short-term. RIL would now need to move above Rs 1,876 to indicate that the short-term outlook has turned positive.

Inability to move above this resistance would be a cue for traders to short the stock with a stop at Rs 1,890. The stock could then move lower to Rs 1,750, Rs 1,716 or Rs 1,640. No fresh shorts should be initiated if the stock closes above Rs 1,876.

— Lokeshwarri S. K.

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