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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