R INFRA and R CAP overview

Reliance Infra:

Reliance Infra bounced from 50 SMA and closed above the previous day high gaining about 4% on Friday. The overall trend looks to be negative as the stock is making lower high and lower low formation.

R infra has given a bearish breakout of cup and handle pattern on Thrusday. Now it is very important for this stock to remain in a range of 555-530. A decisive move above 555 will open up positive possibilities and stock can move upto 570.

As per wave perspective, the stock is moving in a corrective fashion and started 3 wave i.e simple zigzag on downside (a-b-c). Now it is very important for this stock to remain in the downward channel for next two days which will resume the downtrend.  A move below 520 will suggest that it has formed double zigzag (a-b-c-x-a-b-c).

In short, expect R infra to hover near the resistance of the upper trend line of the falling channel. Move above 555 will change the trend and move below 520 will be the sign of resumption of the trend.

Reliance Capital:

Reliance Capital is moving in sync with Infra and bounced from 50 SMA but closed below 20 EMA. The trend is negative as it has breached its previous low of 469 thus discontinuing the higher high higher low formation.

Reliance Capital has given a bearish H&S breakout and moved lower, but on Friday it gained tremendously and tested the neckline and closed below it.

Wave counts are tricky and we shall rely on simple technical analysis and support levels. Indicators such as, MACD and RSI continues to be in a negative territory.

A move above 496 will change the trend and the stock can rally to its preceding high of 510 or even higher.

In short, R cap to move lower as it failed to cross its previous high and moved lower continuously. The target for this stock comes to 450 over short term.


Phani Kumar said…
Hey, thanks for the information. your posts are informative and useful.
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