Reliance Communications: A Follow-up

We recommended a buy on Reliance Communications in September and the stock hit the earlier target of Rs.155 and has since been in a major downtrend. The recent fall has pushed the stock to an area of support and the latest price action suggests buyers are active at the lower levels. Kindly direct your attention to the Daily Chart of Reliance Communications featured below.

As highlighted in the chart above, the price has dropped steadily and the fall was halted at the prior “Demand Zone”. We expect the stock to resume its uptrend and a rally to Rs.165-170 appears likely.

A move past the immediate hurdle at Rs.130 would strengthen the case for a rally to Rs.165-170 range. This positive view would be under threat if the stock falls below the major support at Rs.104.

(The view featured here is based on Technical Analysis of historical stock price action. Please read the Disclaimer)