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Though shares of Reliance Communications remain overbought, the stock is unlikely to see sell-off next week as the relative strength of the stock is still strong. The stock saw some profit booking yesterday in reaction to news that the company has entered into a tower-sharing deal with Reliance Industries Ltd.
However, the relative strength index of Reliance Communications has not yet shown weakness, indicating that the upward momentum has not yet reversed. The relative strength index is an indicator that measures the speed and change in price movements.
Investors have been looking to book profits in the scrip, which has risen 83.6% since Apr 2, when the company announced that it had entered into a fibre network-sharing deal with Reliance Industries. Until and unless the 110-rupee level is breached on the lower side, heavy selling is not likely to occur in the stock. Resistance for the stock next week is seen at 118 rupees.
Shares of Bharti Airtel Ltd is expected to trade with a bearish bias next week, as the company yesterday closed below its 200-day moving average of 289.7 rupees at 288.30 rupees. When shares trade below their 200-day-moving average, there is an indication that the stock has entered into a near-to-medium-term bearish trend.
