Reliance Communications: Near Completion of Channelized Move and Elliott Wave Counts.
Telecom is one of the
underperformer sector as compared to other sectors such as Banks, realty, MNC’s
etc. This means the entire telecom pack which includes Bharti Airtel, Rel Com,
Idea, Tata Com has not performed in sync with Nifty.
We are going to
discuss on Reliance communication as this stock has failed to show any positive
momentum from past 6 months. It is not acceptable for this high beta stock to
underperform even when Nifty moved up almost 1300 points on the upside in last
6 months.
By applying the
combination of basic technical analysis and Elliott wave theory it becomes easy
to forecast the upcoming trend for a particular asset class. Simple technicals
like channels, retracements etc help us to know the possible support and
resistance for the asset class.
From the below daily
chart of Reliance communication, we can see clearly that prices are moving down
after making a high of 164.65 on 20th November 2013. Thereafter it
failed to move above its high and started moving down by breaching its previous
lows which opens negative possibilities. We can also observe that the stock was
precisely moving in a down ward sloping red channel from past 6 months.
Recently in the month
of March 2014, prices failed to move below its previous low and crossed its
previous pivot high which opens positive possibilities. Today prices have also
given a bullish break in a falling red channel which is a healthy sign. Prices
can outperform in next series or so.
As per wave
perspective……………………………………………………………………………………………………………………..
In short, our bias
for Reliance Communication is ……………….as it can move till …over short term.
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