Reliance Industries shares are now down 20% from their peak — Is it time to buy?

Shares of Nifty 50 heavyweight Reliance Industries Ltd. fell for the second straight day on Friday, November 8. The stock has declined in three out of the last five trading sessions.

The stock, over the last one month has declined 8% and has been one of the key underperformers on the Nifty 50 index and among the lead contributors in the index correcting from record high levels of 26,277, which it had hit on September 27.

With this fall, the stock is now down over 20% from its record high levels of ₹1,608, which is adjusted for the bonus issue. The company had announced a 1:1 bonus issue for its shareholders ahead of its AGM in August.

Reliance Industries shares ended 4% lower in the week gone by and have declined in five out of the last six weeks.

With the stock having witnessed the kind of dip it has, is it now a good time to accumulate the Nifty 50 heavyweight?

"Despite the short-term downtrend, the monthly chart of Reliance Industries shows a potential long-side bias," said Ganesh Dongre of Anand Rathi. He advises accumulating the stock at a time when it reaches a crucial support level on the downside, which has been identified between ₹1,220 - ₹1,250. "This range could offer a potential entry point for accumulation. So we will recommend to buy on dip in this stock at the support level of ₹1,220 - ₹1,250 zone with the stop loss of ₹1,170 for a price target of ₹1,350 in upcoming month," he added.

"Reliance industries has broken some of its crucial support levels and is trading below its short term as well as long-term moving averages. Overall structure for Reliance looks weak. However, stock is in oversold zone and can see pullback from current levels that can take prices towards ₹1,335 - ₹1,364 levels. However, as trend remains weak, any short covering move will be short lived, and pullback will be used by traders to exit from long positions and initiate fresh shorts. On lower side, a break below ₹1,270 can drag the stock towards ₹1,240 - ₹1,215 levels," said Aditya Agarwal of Sanctum Wealth.

Shares of Reliance Industries ended 2% lower on Friday at ₹1,280.2. The stock hsa now turned negative for 2024, currently trading 1.1% lower for the year.

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