Reliance Capital on support line

Reliance Capital is a high volatility stock. Its yearly high/low is 669.9/289.5. The stock had rallied from levels of 300 to 665 within the period of 4 months.

But since mid-June the stock has been in consolidation phase & traded in the range of 670 to 535. Declining volumes in lat 2 months clearly indicate the consolidation phase. The stock has almost retraced 38.2% of its previous rally & looks to have found support around 535. From here it is likely to move toward recent high of 670. So the stock could be bought for targets of 625 & 665 with a stop of 535 on closing basis.

Nifty update

Last week nifty gave positive close on all the four trading sessions thereby negating the down effect of previous two weeks & retracing almost back to all time high of 7840.

Now nifty is at very crucial level of 7800. Next two trading sessions are going to be very important for the index. If it closes above 7810 on Monday then 7870 is likely to be reached in next 2-3 sessions. However if the index closes below 7750 which is unlikely event in current readings of charts, the index could again go down to 7600. The basic theory of TA says,"Never go against the trend." The trend currently is uptrend. o it is better to trade long in the nifty for target of 7870 with stop of 7750.