The stock of Reliance Industries was choppy too and formed a spinning top candlestick pattern on the daily chart implying uncertainty in the next leg of its moves.
After testing the significant resistance level of Rs.970, the stock fell, forming a bearish engulfing candlestick pattern that indicates short-term reversal and weakness. On the downside, the stock is testing an immediate support at Rs.940.
Inability to move past Rs.970 can increase the chances of the stock breaching the key support level of Rs.940. In such a scenario, the stock can slip to Rs.925 and Rs.912 in the coming trading sessions.
Traders with a short-term perspective should tread with caution and initiate fresh short positions only on a fall below Rs.940 levels with a fixed stop-loss. An emphatic breakthrough of Rs.970 will mitigate the weakness and take the stock up to Rs.990 or Rs.1,010 in the medium term.
Key supports below Rs.912 are at Rs.900 and Rs.880 levels.
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