Reliance Industries Share Price Downturn Extends As Bonus Shares Bite

Summary:
• Reliance Industries share price trades below key moving averages, and the selloff is likely to continue as long as oil prices remain low.

Reliance Industries share price declined on Thursday, slowing down its recovery after rising from near year-to-date lows during the last two sessions. It traded at Rs 1,307 at the time of writing, down by 1.3 percent on the daily chart. Reliance Industries (NSE: RELIANCE) shares have been on a downward trajectory since late September, compounded by declining global crude oil prices and a selloff of the company’s bonus shares.

The Reliance Industries share price currently trades below key moving average levels, underlining a week traction for an upward momentum. As of this writing, the stock trades below the 20, 50,100 and 200 Exponential Moving Average (EMA) levels on the daily chart. In addition, the 20-EMA is below the 50-EMA, and the 50-MA indicator recently crossed below the 200-MA, confirming a bearish hold on the market.

Reliance Industries issued bonus shares in the ratio of 1:1 in late October, which has proven to have been poorly timed. The largest oil and gas stock in the Indian equities markets has suffered the consequences of such timing, with many investors opting to dump their bonus shares amid a decline in international crude oil prices. As petrochemicals constitute a substantial portion of the company’s investment portfolio, Reliance Industries share price reversal could be impacted adversely by the downward global crude oil price trajectory.

Reliance Industries share price prediction

Reliance Industries share price pivots at 1,310, and the downside will likely prevail if resistance persists at that level. With that, initial support is likely to come at 1,300. However, if the sellers extend their control, the resulting momentum could break below that level to test 1,288.

On the other hand, moving above 1,310 will favour the buyers to take control. If that happens, the first resistance is likely to come at 1,319. However, if the buyers extend their control, it could take the stock above the first resistance, invalidating the downside narrative. Also, the resulting momentum could test 1,329.