Do not buy Reliance says Pillai

Neppolian Pillai of Modern Shares & Stock Brokers is of the view that one should not buy Reliance Industries unless it closes above Rs 1550.

Pillai told CNBC-TV18, "That’s why I feel I was negative on Reliance even at Rs 2,300 with a target of Rs 1,500. Now Rs 1,500 seems to be the best-case scenario in a rally . The importance of this 50-month averages, the same averages for Reliance is in a band of about Rs 1,350-1,510, so the upside is capped surely at about Rs 1,510."

He further added, "I am more worried not from the point of view of Reliance as a stock, but then if these averages act as resistance, I think the next time around this stock collapses then it is going to give up easily Rs 500-600 from here, the downside target is about Rs 875 now if that were to happen then you know what a Nifty or a Sensex could do eventually on the downside. So for us as a house on the upside any stocks rallying, which is broken through the 50-month is a sure sell at least it is not a sure buy that’s very clear. If one doesn’t want to sell it’s their personal call but absolutely don’t make any mistake in buying into this stock, so that stock would continue to remain a sell for us unless and until it doesn’t close above Rs 1,550 then we will take a fresh call on it."

Source: Moneycontrol