RIL gave decisive breakout above 'Flag Pattern'; likely to hit Rs 1,145 in 4-6 months

By Birendrakumar Singh

Reliance Industries’ price movement since February 2014 till date has formed a very broad range. Its low of Rs793 (February 2014) and its recent low of Rs796 (May 2014) has formed a ‘Double Bottom’ pattern.

Earlier the stock bounced back sharply from Rs793 (February 2014) to Rs1,145 (May 2014 high) and thereafter, the price slowly traded lower to Rs796 (May 2014).

The sharp up-move from Rs793 to Rs1,145 and a slower downtrend to Rs796 indicates a symptom of "Impending Bottom". Similarly, the said price development also indicates the formation of a "Double Bottom" pattern formation at Rs793-796.

The above-mentioned "Impending Bottom" and "Double Bottom" formation need to be confirmed, by its decisive move above Rs1,145 levels.

The daily price trend has given a breakout of the "Flag" pattern formed between Rs 1,019 and Rs 983. It has a support at Rs 1019. If it holds, then the stock would move towards Rs1,098-1,119, which is the price target due to the breakout of the "Flag" pattern.

The up-move from 796 till date is marked within the red channel parallel trend lines. The "Flag" pattern formation and the follow-up breakout is just below the channel resistance trend line. In case of a break above the channel resistance trend line, the trend would be bullish and would move to Rs1,145. The time period would be four to six months.

Hence, the trading strategy would be buy Reliance at CMP Rs1,025, maintain a stop loss of Rs995 on closing basis, target is placed at Rs1,119-1,145, in a time period of four to six months.


Reliance Industries daily- “Flag” pattern breakout and channeled price movement




Reliance Industries monthly-“Double Bottom” pattern formation at Rs793-796



​(The author is AVP- Technical & Alternate Research at Systematix Shares & Stocks. Views and recommendations expressed in this section are his own and do not represent those of EconomicTimes.com.)