Reliance - Confirmation on Direction after three Doji - December 2020 tobe on Short Side

The Background 

Reliance has formed three #Doji candles over last four days of November-2020 series expiry. All these three Doji's were formed within the intraday price range of 1920-1980. This kind of formation on monthly expiry of a derivative series signifies that Reliance Industries is all set for a sharp movement on the side of the breakout of the price range.

The Weakness

First trading day of December series, Reliance finally broke the 1920 price range on the lower side during intraday trades, however, closed within the same range at 1929. Also RSI of Reliance slipped below 40 once again which shows the stock is still bearish and could see further correction unless we see divergence in RSI. This shows that there is a higher possibility of a breakdown in Reliance once there is closing below 1920 and this weakness could drag reliance down to test previous low of 1835. Upon closing below 1835, there is Fibonacci Retracement support at following levels:

1. 61.8% - 1795
2. 50% - 1618

Fundamental

Reliance at price around 1600 shall be a very good buying opportunity for long term investors as this analysis is purely on technical however, business moats, fundamentals and streak of fund raising from leading names around the world keeps Reliance a good value pick over longer run.

On an overall basis, Reliance shall get back some strength with bulls in the driving seat only when it starts closing above 2200 levels until then technical study does not advise to rake a long trade.

Summary Trade Setup for Reliance

So summary for Reliance is:

1. If you are holding for long term in Portfolio - Keep shorting ATM or even OTM Calls
2. If you are short - Keep an eye on targets of 1835, 1795, 1618 and below
3. If you are long - Keep stop loss as closing below 1920.