Reliance shares in focus for 2nd session, SAMCO flags historical rally pattern

Reliance Industries shares remained in focus for the second consecutive session on Tuesday, following a sharp rally in the previous trading session, when it zoomed nearly 12 per cent individually and led the broader market rally.

The stock witnessed moderate movement in today’s session after the significant gains, while a technical breakout, exceptional trading volumes and strong September quarter results have drawn attention to its performance.

RIL shares over the week

By 10.43 am, the stock traded at ₹1,294.40 on the NSE after moderating between ₹1,282 to ₹1,307.

Volume breakout

According to Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, Reliance Industries surged nearly 11.6 per cent in a single session, accompanied by an extraordinary volume breakout.

Sheth noted that the stock has decisively broken above a prolonged downward-sloping trendline, indicating that selling pressure may be giving way to fresh buying interest.

SAMCO Securities’ analysis identified nine unique instances since 2000 when Reliance gained more than 5 per cent in a session, with volumes exceeding three times the previous five-day average.

All nine instances delivered positive one-year forward returns, with average gains of 55.32 per cent, according to the brokerage.

However, when compared with Nifty 500 returns, the signal generated outperformance in seven out of the nine instances. It delivered an average alpha of 44.12 per cent over the Nifty 500.

Strong earnings

Sheth said the current breakout comes at a time when several fundamental triggers could improve Reliance Industries’ investment narrative.

One of the key catalysts is the successful Jio Platforms IPO and its listing last week, which unlocks value through a separate market valuation of Reliance’s digital business.

The company’s September quarter results have also added momentum. Reliance Industries reported record consolidated EBITDA of ₹62,409 crore, up 23.9 per cent y-o-y, while record profit after tax (PAT) stood at ₹29,550 crore, up 33.8 per cent.

The oil-to-chemicals (O2C) business delivered a particularly strong performance, with EBITDA rising 67.9 per cent. Jio’s EBITDA grew 16.6 per cent.

According to Apurva Sheth of SAMCO Securities, the combination of a technical breakout, exceptional trading volumes, improving earnings and value unlocking through Jio makes Reliance Industries an interesting stock to watch.

The brokerage’s historical analysis also points to positive one-year forward returns following similar volume-led rallies, although the stock outperformed the Nifty 500 in seven of the nine instances.