New All-Time Highs In Reliance...What's Next?
First, let's start with the weekly chart to show where prices are from a structural perspective. This type of chart is most helpful for people looking out 6-12 months or longer.
Click on chart to enlarge view.
Since the breakout above 1,640, our target has been 2,495 and we're approaching that level. We want to see if this area of potential resistance is acknowledged by the market or if we simply blow right through it and continue higher.
Either way, if prices are above 2,495, we can use that as our risk management level and look for further upside towards 3,875!
And from the perspective of those looking out over the next 3-6 months, we've been using the Fibonacci Extensions from the 2014-2017 base as our guide. This week prices just about reached our upside target range of 2,340-2,375, so we're watching closely to see how prices react to this area. If they do break above that range, 2,340 becomes our new risk management level and our next upside objective is up near 3,540.
Additionally, the stock is hitting new all-time highs relative to the Nifty 500, Nifty 50, and Nifty Energy Index.
To conclude: It's clear that Reliance is a secular leader that's being accumulated by institutions, not distributed. This has been a big winner for us and we expect it to remain so given the strong absolute trend, positive momentum characteristics, and relative strength versus its market/sector/market-cap segment.
With that said, prices are approaching our intermediate and longer-term price objectives, so we want to see how the market reacts to these levels and readjust our risk management levels/targets as necessary.
In the meantime, there are other secular leaders breaking out to new all-time highs. Read about why we're buying TCS after this week's breakout.
We'll be discussing Reliance, TCS, and other secular leaders in this Tuesday's Members-Only Conference Call. We hope to see you there!
[hide_from accesslevel="premium-india"]If you enjoyed this post and want access to all of our premium content, start a 30-day risk-free trial. Or sign up for our "Free Chart of the Week" to receive more free research like this.
[/hide_from]
Thanks for reading and please let us know if you have any questions!
Allstarcharts Team