Reliance Industry Share Price: Is It Set for Another Bull Run?

Summary:

Reliance industry share price closed yesterday’s trading session with a percentage point drop, a second consecutive bearish session.

Reliance industry share price closed yesterday’s trading session with a percentage point drop. The drop marked the second consecutive session that resulted in the company losing its value following a recent price surge that resulted in an 8 per cent price surge in three trading sessions.

The drop came amidst reports that the company would be demerging to form a new financial services company and list it on the Indian stock exchanges. In a statement, it was revealed that Reliance Industries Ltd (RIL) would be issued an equivalence of one equity share of the newly formed Jio Financial Services Ltd (JFSL) for every share they hold of the parent company.

The new company, JSFL will launch a consumer and merchant lending business while enabling the RIL to monetize its verticals. Many experts in the industry have opined that the decision to demerger may be a great opportunity for RIL and may be a positive trigger that unlocks its value.

Brokerages reading this latest move combined with other techniques have, in most cases, maintained a buy bias of the shares. For instance, analysts have cited the better-than-expected retail revenue and Ebitda growth of 11.8 per cent and 10 per cent, consecutively. Motilal Oswal finds the stock likely to go up to Rs 2,855, while other analysts, such as Nuvama Institutional Equities, see it at Rs 3,205 and Sharekhan at Rs 3,050.

Reliance Industry Share Price Analysis

Based on the available data in the chart below, combined with the fundamental analysis above, I expect the Reliance Industry share price to recover soon. Currently trading at Rs.2440, there is a high likelihood we might see prices rising to trade above the 2615 supply level.

There is also a high likelihood that, for the long-term, the Reliance Industry share price may surge to break and hit the 2815 long-term supply level. However, a trade below the 2371 demand level will invalidate my analysis.