Tuesday, October 15, 2013

How to trade Reliance Industries post Q2 results?

Results Update: Reliance Industries Ltd (RIL),controlled by Mukesh Ambani, India's richest man, reported better-than-expected results in the second quarter.
RIL's net profit in the quarter ended September 30, 2013, rose 1.5 per cent to Rs. 5,490 crore from a year earlier, slightly better than estimates of Rs. 5,440 croreRIL's revenue in the second quarter also beat analyst expectations. RIL said its second quarter rose 14.2 per cent to Rs. 106,523 crore, against expectations of Rs. 102,320 crore.
Reliance Industries stock prices had a Gap up opening near 898, but the stock has pulled down from there and is now quoting with less than a percentage gain. Trading simply based on news or result announcement can be very tricky. If you do not have access to management meets, you are not an expert fundamentalist with sophisticated excel models, know how of the industry sector, you might just be as good as others. Even people having all the mentioned things still cannot know what the stock price is going to be for the day. Technical analysis and Elliott wave principle is the key to look at price patterns and forecast the future objectively.
Below we have shown long term charts of RIL published in the monthly report – The Financial Waves
Figure 11: Reliance Industries Weekly chart
Reliance Industries is one of the highest volume traded stocks on NSE. This stock carries 9.34%weightage on index and carries 3rd highest market capitalization. We have shown Reliance industries weekly chart, since 1984 prices are moving higher by taking support and resistance of the upward sloping equidistant channel.
In the year 1998 prices found support of the channel, breached six years consolidation (1991-1998) on upside and ended primary wave II near 35 and started next leg on upside in the form of primary wave III.  Interesting observation is that Sensex has completed primary wave II in the year 2000, whereas, Reliance industries ended primary wave II in the year 1998. This shows thatReliance industries has started the impulsive move earlier than Sensex.
….weeks bottoming cycle is working well since 1985 onwards. All the major …….are made near this cycle. This confirms and synergizes that intermediate wave ……… bottom formation is plausible in
After completing current wave, we expect stock should resume the major uptrend indicating nextBULL RUN towards ………… levels.
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