Reliance Industries shares could be approaching a potential turnaround after a prolonged correction, with Monarch Networth Capital identifying a technical reversal pattern that may pave the way for a recovery of up to 20% over the next three to four months. The brokerage has named Reliance Industries (RIL) its stock pick of the week, recommending that traders accumulate the stock in the ₹1,180–1,220 range, with a target price of ₹1,350–1,450.
The recommendation implies an upside potential of 12–20%. However, the trading strategy comes with a clear risk-management condition: traders should maintain a stop loss below ₹1,100 on a closing basis.
According to Monarch Networth Capital, Reliance Industries had staged a strong rally before encountering resistance around ₹1,600–1,620. The stock subsequently entered a multi-month correction and retracement phase, giving back a portion of its earlier gains.
The correction brought the stock towards the ₹1,150–1,180 zone, which has emerged as an important support area. The brokerage believes the price action around this range is significant because the stock appears to be forming a triple-bottom reversal pattern.
A triple-bottom pattern is a technical chart formation in which a stock tests a similar support level on multiple occasions but fails to break decisively below it. The pattern can indicate that selling pressure is weakening and buyers are becoming more willing to defend the support zone. If the support holds and buying interest strengthens, the stock could begin moving towards higher resistance levels.