Reliance Industries has been one of the most under-performing stock in Index since the 2008 Crisis but finally we are hoping for a turnaround i…You feel the recent rally from 1000-1335 is enough for now?….Naaaa..The Game has just begun today .
Reliance industries is not just technically undervalued but also fundamentally. Lets have a look at Fundamental snapshot
Though am not a best Fundamental analyst but what i can understand from above figures is that sales have increase 119% with profit rising 40% which are the most crucial numbers to arrive at market price but still the stock price has just risen 12% during this last 9 years. The best part what i understand is that indicators which affect PAT, which is GRM, Crude prices and USd-INR, all have been negative but still PAT was sufficient to grow at health rate. Now when we expect Crude prices to rise globally with Rupee getting strong, am sure GRM would increase PAT for the company from Current levels. This is surely gonna help to shoot up Reliance’s Oil business.
BUT the cherry on the top would be Reliance Jio. As you all could notice in Businesses row, company has added so many businesses in last 9 years and from tomorrow its biggest investment Reliance Jio would start giving fruits. Almost all fixed investment and expenses on Reliance Jio has been discounted with 0 revenue. But from tomorrow revenue of Jio would be start flowing in which would raise bars of PAT in next quarter. So you must have Reliance on Jio.
Now coming to some Technical know-hows, today Reliance has managed to close above 1320 after 9 years where we last saw close at 1320 on 21st May 2008. This was the reason why we took comparison of 2008-2017 in the above table.
As you all could notice in the chart above, Reliance has given a Flag pattern breakout today with high delivery volume with highest closing in last 9 years. Flag pattern breakout almost gives another lap of equally fast rally as we saw just before profit booking in march. Which means we are moving for 1550 on stock within next 3-5 weeks. So now the stock is going to be purely a out-performer even at this levels.
So strategy would purely be BUY for tgt 1550 sl: 1200 for traders while investors can accumulate for nexr 3 months until Jio revenue gets reflected on balance sheet. Stock could surely be a multi-bagger for long term investment.