Reliance Industries shares hit fresh one-year low; time to buy, sell or hold?

Shares of Reliance Industries fell for the fifth straight session to hit their fresh one-year low level in Wednesday's trade. The stock today slipped 2.13 per cent to touch a day low -- also its 52-week low -- of Rs 2,228 against a previous close of Rs 2,276.50. So far, this hasn't been the year that the oil-to-telecom conglomerate would have been anticipating. The RIL stock has fallen a little over 13 per cent on a year-to-date (YTD) basis. A total of 4.22 lakh shares changed hands today on BSE, which was higher than the two-week average volume of 2.34 lakh shares. Turnover on the counter stood at Rs 95.42 crore, commanding a market capitalisation (m-cap) of Rs 15,14,116.33 crore.

Analysts said that Reliance has been hovering near Rs 2,300 level and resistance on the counter could be seen at Rs 2,344, followed by Rs 2,345, Rs 2,355 and Rs 2,424 levels. Yet, one analyst suggested traders against initiating any fresh longs for now, while another said the stock may slip below Rs 2,200 in the near term.

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One, said, "Reliance has been in a corrective phase for quite some time and is hovering near the crucial zone of Rs 2,300. Historically, the stock has reversed from the mentioned zone, and the same is expected to be seen this time. As far as levels are concerned, Rs 2,240-2,220 is likely to cushion the fall in the comparable period. However, any breach below the same could disrupt the technical charts."

On the flip side, the initial resistance is placed around the bearish gap of Rs 2,345-2,355, followed by the immediate swing high of Rs 2,424-odd level, Krishan added.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Daily RSI (Relative strength index) is continuously travelling from 30 to 55 levels at the current juncture, which is a sign of bearish sentiment in the coming sessions. Recently it broke its crucial support of Rs 2,300 which is a matter of concern."

At the current market price, fresh longs are not recommended as we are expecting Reliance to test Rs 2,200 levels in coming sessions, Patel stated.

Pavitraa Shetty from Tips2trade said, "On the daily charts, a close below crucial support of Rs 2,292 has been achieved and this opens for a potential lower target of Rs 2,195 in the near term. Strong resistance will be at Rs 2,344."

The stock was last seen trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 35.92. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 37.13.

The scrip has an average target price of Rs 2,896, Trendlyne data showed, suggesting a potential upside of 27.58 per cent. It has a one-year beta of 1.10, indicating high volatility on the counter.

Meanwhile, Indian equity benchmarks plunged into the red in late deals, dragged by banks, financials, consumer goods, automobile and energy stocks.