Reliance Industries’ share price opened today’s trading session at 2535, a 4 per cent gap from yesterday’s closing price of 2441. However, since the markets reopened, Reliance Industries’ share price has traded aggressively downwards and is currently down by 2 per cent.
Part of the reason we have seen the share prices open with such an aggressive bullish gap is the Indian government cutting windfall tax on oil producers yesterday. According to reports, the changes will see companies such as Reliance Industries, Oil and Natural Gas Corp and Oil India Ltd benefit greatly,
The windfall tax was imposed less than a month ago and saw the government instituting a 2 rupees a litre on fuel shipments. The windfall tax cut also saw a 6-rupee-per-litre levy on gasoline removed on gasoline exports.
The impact of such a move will see Reliance Industries’ share price continue to recover from a tough market. In my July 12 Reliance Industries analysis article, I looked at other issues that were affecting the share prices, including the rising cost of living in India that had resulted in the company’s operating costs rising. I also looked at the global shortage of oil and gas worldwide, which has made the company struggle in the markets. However, the cutting of windfall tax will see the company start to recover.
The driving force for Reliance Industries share price for the next few trading sessions will lean more towards fundamentals. Therefore, despite today’s chart showing a drop of 2 per cent, the prices opened with a 4 per cent gap, and hence the price level is up over 2 per cent from yesterday’s closing price.
In the upcoming trading sessions, I expect the prices to continue going up. As a result, there is a high likelihood that we will see prices trading above the 2615 supply level in the next few trading sessions. My bullish analysis will, however, be invalidated should the prices trade below the 2371 demand level.
This post was last modified on Jul 20, 2022, 09:49 BST 09:49