Russia-Ukraine war: Amid soaring crude oil prices due to the escalation in the Russia-Ukraine war, the Indian stock market witnessed a strong pullback rally on Friday, and frontline indices witnessed a broad-based jump that augurs well for Dalal Street bulls. Shares of the BSE Sensex heavyweight Reliance Industries Limited (RIL) showcased a strong rebound and ended 3.35 per cent higher, which must have attracted the attention of bottom fishers.
According to stock market experts, escalating tension in the Russia-Ukraine war is expected to benefit oil-producing companies, including Reliance. They said that soaring crude oil prices due to the geopolitical tension are expected to allow margin benefit to Reliance Industries, and hence, Reliance’s share price is rising. They expected the uptrend in RIL share price to continue soon and Reliance shares to touch the 50-DEMA range, around ₹1350. They said Reliance’s share price may become bullish if it gives a breakout above this 50-DEMA range, as its retail and telecom business is expected to do well in the medium to long term.
Benefit from soaring crude oil prices
On how the Russia-Ukraine war would benefit Reliance’s share price rally, Mahesh M Ojha, AVP — Research at Hensex Securities, said, “Due to escalation in the Russia-Ukraine war, crude oil prices are skyrocketing, and the trend is expected to continue until there is some ease in the geopolitical tension. So, Reliance and other oil maker companies are expected to reap margin benefits on their buffer stocks, which is expected to cement their upcoming quarter numbers. So, the market is expected to offer a discount on this short-term benefit that will trickle into Reliance’s share price. Apart from this, the company’s retail and telecom business is expected to sustain its uptrend. So, Friday’s rally in Reliance share price should be seen from this angle. Those with surplus money may think of looking at Reliance shares as the stock looks promising for all sets of time horizons.”
Reliance share price target
Sharing the details of technical chart, Shiju Koothupalakkal, Senior Manager – Technical Research Analyst at PL-CAPITAL, Prabhudas Lilladher, said, “Reliance share price has witnessed a decent erosion from ₹1600 zone to touch the low of ₹1217 level losing almost 25 per cent from its peak level, with currently indicated a strong pullback with a bullish candle formation on the daily chart to show signs of improvement in the bias. The RSI hovers near the highly oversold zone and has indicated a positive trend reversal to signal a buy. With the chart technically looking attractive, one can expect a pullback to rise till the 50-DEMA zone of ₹1350 levels as its immediate target in the coming days with the ₹1215 zone maintaining as the near-term support level.”
The Prabhudas Lilladdher expert said that Reliance’s share price may become highly bullish if it manages to break out again above the 50-DEMA range on a closing basis.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
