Top Buzzing stock: Reliance Industries Ltd

The stock of Reliance Industries has surged over 1.3% on Tuesday and is one of the top five gainers of Nifty stocks. 

Reliance Industries Limited is a conglomerate, engaged in refining, manufacturing of refined petroleum products, telecom infrastructure and services, retail, Jewellery, etc. It is the top company in India with respect to market capitalization. It holds the highest weightage of about 10% in the Nifty 50 index. Naturally, the company has strong growth fundamentals and aggressive business plans which makes it one of the favourite stocks to hold among the investors.

The stock of Reliance Industries has surged over 1.3% on Tuesday and is one of the top five gainers of Nifty stocks. On Tuesday’s trading session, the stock has recovered about 40 points after hitting the day’s low at Rs 2310. In the past few days, the stock has found good support at Rs 2300 which also happens to be its 200-DMA. Naturally, the stock has bounced back strongly from there and has recorded above-average volume during the process. The short term outlook is looking bearish, but the stock is showing signs of improvement lately.

Analysing the derivatives data, we see that maximum open interest at the call side stands at 2500 followed by 2400. However, after today strong price structure, maximum call unwinding has been done at 2400 strike price, which suggests that the stock might not fall much from here. Moreover, we see that the long build-up has been done at the 2360 call option, which demonstrates that the stock is likely to move further up. Moreover, the futures open interest has fallen by nearly 1%, which suggests that the shorts have been covered on Tuesday.

Comparing the stock’s performance against the benchmark index, we see that the stock has delivered about 18% returns as against 13% returns of Nifty over a year. As the stock trades above 200-DMA, the long term outlook of the stock is still bullish. With such strong fundamentals, investors can plan to buy this stock on each dip.