Anything can happen in the stock market, uncertainty is the price you pay to get the reward that you seek
Breaking down my analysis on one famous company Reliance Industries !!
It’s no more an ONGC company, it entered into telecom, ethnic wear, energy , retail and what not, it’s even trying to enter into insurance business. When you have too many things in hand, you may fail to bring profits on the table. That might be a serious concern when trying to build monopoly. One can say tata also entered into many sectors, yes but it has segregated the companies differently, one can see listed players in the market like tata steel, TCS, tata consumers like that. So, one can invest or analyse the segment that they wanna invest in.
Advantages of reliance:
- Stable government in the coming elections will be good for reliance
- It can list reliance jio, reliance retail like by bringing an IPO. This will create huge share holder value. Currently everything is in one share, reliance industries. So, hard to unlock or calculate valuations of that company.
- If Nifty goes up, operators will never fail to push Reliance upwards and reliance holds good part of Nifty. So if market is in green, most probably this company would be in green in longer time frames.
- Price correction and time correction has happened recently
Disadvantages:
- Company doesn’t have pricing power in the segments which they are working on
- Right now, long term vision is shady in the investor lens.
- Cannot see good return on capital employed like other companies like asian paints and Nestle.
- There is one time in the past where Reliance has given almost zero returns for the 5-6 years, can we see that again, can’t say. It’s an open ended question.
2000 is good support and 2800 is stiff resistance for Reliance, u can observe swings in these area, one play with these prices if anyone has good grip on playing with cash in short term. Put strict stoploss according to your entry.
Long term view, I don’t see a particular segment it’s trying to breakthrough, so don’t bet for long-term.
Short term view, since market correction has eaten up the price largely, one can see rebound if FIIs and DIIs also help a bit, let’s see.
Everyone can take their due diligence before investing, be accountable for the trades you take !!
