Should I buy Reliance now?

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Reliance shareholders will have to pay only 25 per cent for subscribing to the company's rights issue, balance will have to be paid in two installments
India's most valued firm

Another major announcement by Reliance yesterday as it strikes 6 th deal. Company on Friday announced the sale of 1.85 per cent stake in its digital unitJio platforms  to Abu Dhabi-based sovereign investor Mubadala for Rs 9,093.60 crore. Reliance is aiming to become a debt free  company.Now combined six deals have injected Rs 87,655.35 crore in the oil-to-telecom conglomerate to help it pare debt.

Stock has witnessed a decent rally from its March low of 866.98 (23-Mar-2020). Today RIL is trading above 1600, the level will see steep resistance to break out.In early hours of trading it hit a new 52 weeks high of 1,618.00 and has corrected somewhat after doing so.

Stock rally is driven by continuous flow of positive news but it is not supported by volumes which are on a decreasing trend recently.

Photo credit: TradingView

RSI and stochastic, RIL is overbought territory and is likely to witness some correction before a fresh leg of rally.

One should buy the stock only if RIL closes above 1600 with volume spurt. Else one should consider shorting the stock or buying a put with a target of 1490.Long term investor should consider accumulating the stock at lower levels as company is expected to do well in long run.

NIFTY has witnessed a sharp rally recently along with major global markets on relaxation of lockdown. But economic growth and unemployment have plunged to all time low in recent decades and is unlikely to peak up.Also one need to give attention to COVID activity, India is witnessing an increased caseload of COVID-19 and tally is close to 2.3 lakh cases.

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