Reliance Industries and Jio Financial Services could see further gains after their recent price action showed signs of a technical reversal, according to Rahul Sharma, Director & Head Technical and Derivatives at JM Financial Services. He believes Reliance Industries has moved out of its recent downward trend after finding support around ₹1,150.
The stock's sharp rally, backed by strong trading volumes following its earnings update, has improved its technical outlook. Sharma sees the next key level for the stock in the ₹1,300–1,325 range. He believes the current momentum could continue.“Today, it has gone up with significant volumes, and generally, result day moves are the ones which hold on pretty well.
So one can look to add at these levels have a stop loss placed at ₹1,200 in case a trade has to be taken. Otherwise, I think the bias and trend both remains pretty much positive.”Jio Financial Services is also showing signs of a potential turnaround.
The stock has been under pressure for some time, but buying interest has picked up, with trading volumes moving above their average levels. Sharma believes a decisive close above ₹215 would strengthen the reversal signal and open the door for further gains.
On the downside, the ₹205–206 zone is an important support area, where the stock has been consolidating over the past few sessions. On the broader market, Sharma believes largecap stocks are beginning to regain investor interest after a period of relative underperformance by midcap and smallcap stocks.
He sees the Nifty moving towards 23,500 in the near term, with 23,800 emerging as the next important target. The index has also been forming higher lows on the weekly chart, indicating an improvement in its technical structure. According to Sharma, the 23,200 level is an important mark to watch, while a sustained move above this level could support further gains.
However, he cautioned that markets could remain volatile ahead of the major US event scheduled for this week. With India VIX still above 15, a further rise in volatility cannot be ruled out. He suggested that traders consider bullish strangles and straddles on the Nifty ahead of the event, while waiting for greater clarity on the market's direction once it is over."The best strategy in such a case is to follow levels for Nifty," Sharma said, identifying 23,200 as a key level and 23,500 as the next resistance.
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