Friday, January 22

RIL sees delivery-based buying of 40% against 3-month average of 30%

Reliance Industries witnessed delivery to trading based buying of 40.04% Friday, way above the 29.7% three month daily average, even as the company announced a big gas find with partner BP in the KG D6 basin post market hours. Analysts expect the stock to test the 2065-85 level initially. Sustaining above this level with volumes could take the stock to Rs 2200, feels Suniil Pachisia, VP, Pratibhuti Viniyog Ltd.

The RIL GDR was up 0.7% at the time of writing, having closed up 0.6% at Rs 1998.10 Friday, recovering over Rs 30 from the day’s low.

Rajesh Palviya, technical head, Axis Securities, expects the Nifty’s rally from 13760 level to be driven by RIL. He advises buying a 2000 call and selling a 2200 call expiring December for “playing a possible move through Rs 2200” from Friday’s close.

Option traders have sold substantial call options at 2000 and 2100 strikes for December 31 expiry. These levels will have to be conclusively broken for the sellers to skate off their short positions, which would push the stock higher.

Option sellers gain when an underlying stock trades below the strike sold plus the premium received from option buyers. But they lose when an underlying trades above the strike sold plus premium received from buyers.

Analysts also expect a potential rally in RIL which has consolidated for the past few months to aid the Nifty’s move toward 14000.
Credit: Stocks-Markets-Economic Times

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