Reliance share price tanks over 7%. Is this fall a good buying opportunity?

Reliance share price tanks over 7%. Is this fall a good buying opportunity?


Reliance Industries share price tanked over 7 per cent on Friday session following Government of India (GoI) levying taxes on windfall gains made by domestic refineries. Reliance share price on Friday opened with a downside gap of near 20 per share and went on to make its intraday low of 2,365 apiece, giving fear to its shareholders of hitting lower circuit. However, the stock pared its early morning losses in the second half and ended at 2,406 per share levels on NSE.

According to stock market experts, export oriented oil manufacturing companies are expected to make staggering income from cheaper crude oil being available by the Russian government. In that scenario, Reliance Industries Limited (RIL), which is one of the biggest diesel exporters in India is also expected to incur windfall gains. So, the GoI move aims to ask for its share in the additional income Reliance and other oil making companies are expected to collect after Russia-Ukraine war. They said that Reliance Industries shares are expected to feel the pressure as market is expected to further discount on Reliance shares when the market opens next week.

Speaking on the reason for dip in Reliance share price, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “GoI levying taxes on windfall gains made by domestic oil refineries has not gone down well on the Dalal Street. Reliance shares nosediving on Friday has to be seen from this perspective. As Reliance is one of the major diesel and other oil exporter company in India, it is expected to continue receiving the beating. So, Reliance shares may continue to remain under pressure next week as well because the market may further discount on this GoI move.”

On what technical chart suggests in regard to Reliance share price pattern, Rohit Singre, AVP- Technical Research at Bonanza Portfolio said, “Reliance share price has strong support at 2360 apiece levels. If the stock continues to remain above this level on first half of the Monday session, then only we can expect some rebound in the counter. Otherwise, negative bias would continue in the stock.” 

Rohit Singre of Bonanza Portfolio went on to add that on breaching of 2360 support, there can be further sharp downside movement. So, those who want to take fresh buying position in the counter, they are advised to wait for some time as they might get this quality stock at more discounter price in next few sessions.

Meanwhile, Prabhudas Lilladher has upgraded its Reliance Industries share target from 3,000 per share to 3,277 per share in long term citing, “RIL with access to discounted Russian crude (discount at over USD 30/bbl) and EU exports is best placed to capitalize on tight market conditions, given high refining complexity. We believe higher gas prices along with strong growth in telecom (continued tariff hikes) and retail (store expansion), make RIL a preferred play in challenging times. Reiterate ‘BUY’ with revised PT of 3,277 per share.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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