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Reliance Industries moved in an extremely narrow band between Rs 2,000 and Rs 2,100 last week. The odd intra-day decline below Rs 2,000 could not sustain due to buying interest at those levels. The stock has completed a five-wave move from Rs 2,706 and the current sideways move could be followed by further decline to Rs 1,814 or Rs 1,538. However, the stock has strong long-term support at Rs 2,000 and a recovery from this level can take the stock towards its all-time high again.

Short-term traders should initiate fresh shorts only on a close below Rs 2,000. The subsequent short-term target would be Rs 1,780. The resistances for the week are at Rs 2,141 and then Rs 2,262. Move beyond the second resistance would mitigate the negative short-term view.

— Lokeshwarri S. K.

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Play defensive in a volatile market

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