After moving in a downward sloping channel, Reliance Communications (R Com) has broken out above the upper trendline of this channel.
Last week we saw, the stock arresting its downward slide which began from second week of June 2009 and giving a close above crucial moving averages. From the high of Rs362, the stock saw a low of Rs231 last week.
The decline in the above pattern was accompanied with lower volumes. However, we saw some stability returning back in the stock, recording its highest volumes in last five weeks.
A move above Rs280 with expansion of volumes could see the stock touching the levels of Rs305 and above in the medium term. The short term oscillators are showing upward movement.
Keeping in mind, the above-mentioned technical evidences, we recommend traders to BUY the stock between the levels of Rs274-280 with a stop loss of Rs266 for a target of Rs290 and Rs295.