The stock of Reliance Industries Limited (RIL) (₹2,283.95) is ruling at a crucial level just like the overall market. However, the long-term outlook remains positive for RIL. The stock is finding an immediate support at ₹2,192 and a major one at ₹2,028. A close below the latter will alter long-term bullish view on Reliance Industries. In this event, the price can fall to ₹1,805 which is the major support level for the stock. On the other hand, it faces an immediate resistance at ₹2,388 and major one at ₹2,449. A close above the latter can push Reliance Industries towards ₹2,596 and a breach of this level would re-ensure the current bullish trend.

F&O pointers: The counter witnessed long unwinding during February expiry, signalling traders are not willing to rollover the long positions to March series. Yet, the stock is now above a strong support and so, a recovery is highly likely. Option trading indicates an initial range of ₹2,200-2,400 as accumulation of open position was concentrated in the respective put and call strikes. A larger range is seen between ₹2,000 and ₹2,600.

Strategy: Traders can turn investors this week, as we recommend going on long Reliance Industries futures (₹2,288.65), which can be rolled over for at least six expiries. Investors can place an initial stop loss at ₹2,028 which can be shifted to ₹2,450 and ₹2,600 once the stock decisively move past these levels. Investors can aim for an initial target of ₹2,670. Traders with a penchant for higher risk can keep the stop loss at ₹1,995 to allow more room for a recovery, should there be more correction.

This strategy is risky, as price swings will need high margin commitments. So, this strategy is for investors who can withstand wild swings (given the current nature of market condition) and have deep pockets to meet margin commitments.

Follow-up: Hold Titan ₹2,500-call for two more weeks.

Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.

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