Ambani brothers took a step towards reconciliation in their long-running feud on Sunday 23rd May 2010
Next day the stock opens and high of Rs.1049 is made on 24th May and on 1st June high made was Rs.1049 after which @ 12.50P.M freak trade in BSE made low of Rs.840. When everyone on the street is bullish and many analyst previously cited brother’s feud as reason for RIL low Valuation, now favorable court order or Ambani brother’s reconciliation didn’t move the stock higher this stock trades below 100DMA & 200DMA.
RELIANCE saw a freak trade where the stock almost hit low of Rs.840 where 66,000shares were traded in BSE and there are many reports which contradicts each one.
1) This was a mistake selling where instead of ICICIBANK the dealer sold RELIANCE
RELIANCE being one of the top traded stock in both exchange how can a volume of 2lac or 5lac share take it down 20% as the trade @ 12.50 which is not a opening freak trade also. Is Indian market lacking depth?
2) Who was the seller as few news say it was this was European based fund
Due to crisis in Europe few funds can see redemption pressure and they selling can be natural but where did loyal Indian investors who were very bullish on RIL after brothers compromise go.
There should be something I am missing but this doesn’t give me comfort few reason I see is that BP Oil spill which has pulled other Oil & Gas drilling stock price globally and maybe that has impacted Valuation of Indian major like RELIANCE which is trading @ 21P/E can be highly valued and Talks of Compensation to RNRL is not considered as we don’t have any detail.
Not Considered by me
*Rs.1049 is considered double Top
*Many analyst feel freak trades which on tradable basis normally reaches and we have seen DOW come back to the intraday Crash level recently.
Technically Speaking 100DMA is likely to cut 200DMA from top making a Dead Cross which is also bearish if Rs.1050 above close is not seen. 100DMA & 200DMA=1045
