Reliance Communications was in the eye of the storm that rocked the market last week and the stock was sucked down into a vortex of selling pressure to its life-time low of Rs 89.7 on Friday. It had shaved off 22 per cent from the previous week’s close at that point.The trends along all-time frames — long, medium and short-term are down in the stock.

The stock had strong long-term support around Rs 132. Since this level was breached last month, a weekly close above this level is now required to mitigate the bearishness. Investors wishing to take fresh exposure to the stock should wait for a close above this level before doing so. Subsequent resistances are Rs 160 and Rs 205. Medium-term view will turn positive on a close above the second resistance.

The tricky question is - what should those still holding the stock do? These investors should have exited the stock once it closed below Rs 130. If they haven’t then the

stop-loss can be moved lower to Rs 75. If this level breaks, it is not possible to guess where the slide can halt. That said the movement over the last two days implies that some buying is emerging at current levels.

BEML (Rs 616.5)

BEML tumbled headlong in to a deep pit triggered by weak earnings to record the weekly low of Rs 565. Key medium-term support for the stock is Rs 665. Though the stock closed below this level on Wednesday, the bounceback on Friday is promising and could denote a false break-down. Investors can, therefore, hold the stock with stop at Rs 550. Subsequent supports are at Rs 400 and Rs 330.

Key resistances for the days ahead are at Rs 820 and Rs 1,000. Failure to move above Rs 820 will denote impending weakness.

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