The telecom sector has shown resilience in the past few weeks amid rise in volatility, but Reliance Industries has remained resilient and is a preferred proxy plays for the sector.

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The stock has risen 18 per cent in last one year compared to 14 per cent upside seen in Nifty50 in the same period.

Reliance Industries is one of India’s biggest conglomerates with a presence in oil refining and marketing and petrochemicals (O2C), oil & gas exploration, retail, digital services, and media, etc. making it a well-diversified business entity.

At the EBITDA level in 9MFY22, O2C and oil & gas contributed 50% while retail, digital, and others contributed 10%, 34%, and 6%, respectively, ICICIdirect said in a report.

RIL with a market capitalization of more than Rs 16.5 lakh cr hit a 52-week high of Rs 2750 on 19 October and post that the trend went sideways.

However, the stock has been finding support near the 52-week EMA to form a triple bottom pattern on weekly charts which suggests strong base formation.

Strong base at the 52 weeks EMA coincided with change of polarity zone of 2300 (base level). A breakout from this level suggests a higher target of Rs 2670 that translates into an upside of Rs 2412 that translates into an upside of over 10 per cent, suggest experts.

A triple bottom is considered a bullish chart pattern in technical analysis which is formed when the stock price bounces back three times from a similar price level on three different occasions.

The stock rose a little over 2 per cent in last week but fell nearly 4 per cent in 1-month, Trendlyne data showed compared to 0.4 per cent fall in a week, and nearly 5 per cent decline seen in a month in Nifty50 in the same period.

The stock is trading above crucial short-term moving averages such as 30, and 50-DMA. However, it is still trading below the 100-DMA placed at 2472, data from Trendlyne showed.

“The telecom sector has shown resilience despite recent elevated volatility. One of the preferred proxy plays for the sector is Reliance Industries, which has formed a potential triple bottom at 52 week’s EMA,” Pankaj Pandey, Head – Research at ICICI Securities Limited, said.

“Over the past three months, the stock has retraced 61.8% of August-October 2021 rally (2016-2751) at 2300. A slower pace of retracement indicates inherent strength,” he said.

Pandey believes that the recent higher base formation has set the stage to resolve higher and head towards Rs 2670 levels as it is the 80% retracement of secondary correction (2751-2247).

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)