RIL: Traders can initiate short position on a fall below Rs.870 with a stop-loss at Rs.880

RIL reverses down from a key hurdle

The stock of RIL tested the key resistance at Rs.900 in the previous week and slumped 2.8 per cent. Only a conclusive breakthrough of this hurdle can strengthen the stock’s bullish momentum and take it higher to Rs.920 and Rs.940 levels in the short term. But, last weeks downward reversal shows weakness. The stock now hovers above an immediate support level of Rs.870. A downward break will lead to further decline to Rs.850 levels in the near term. 

Traders can initiate short position on a fall below Rs.870 with a stop-loss at Rs.880 levels. Further decline can happen on a decisive fall below Rs.850, to Rs.830 and then to Rs.810 in the coming weeks. 

The stock has been in a sideways consolidation phase in a broad band between Rs.810 and Rs.940 since December 2014. Investors should remain on the sidelines until a clear trend emerges.