From
last few days Reliance is a buzz in the mouth of every investor. In my last
article I had only given my views on Reliance. Today, I will let everyone know why traders are bullish on Reliance?.
Click here to read my last article
As
per the current scenario the stock has given a bearish breakout
and the stock has started correcting as you can see in the chart below
"Inside Funda"
From
last April 1st 2014 both Relaince and 13 Urea companies have failed to settle
the price of natural gas supply rate and the issue had knocked the door of
our oil minister Veerappa Moily. And the issue of keeping gas price below half
of the global price is the main funda behind. So, Moily Had given a
press relies saying
"When the proposal came
to me, I rightly ordered that after the model code of conduct is lifted, (the)
price may be announced for the quarter July-September and also for the quarter
April-June, as per the approved guidelines by the cabinet,"- by Mr
Moily
What is the problem?
RIL
and urea companies failed to settle the key terms of gas supply from 1 April on
expiry of the five-year contracts that priced gas from the eastern offshore
KG-D6 fields at $4.205 per million British thermal unit (mBtu). While RIL
agreed to continue supplies in the interim period, the dispute pertained to the
rate at which consumers should provide payment guarantees—the expired price or
$8.34, which would have been applicable from 1 April had the Election
Commission not postponed implementation of the Rangarajan Committee formula
till completion of the general election.
"Moily's Game Play"
Reliance
and Mr.Moily is are under a pressure of Election and Moily had informed that he
will implement the price with a special formula
But, India's main opposition "Bharatiya Janata Party
(BJP), widely expected to win the most seats in the election and oust Moily's
Congress party-led government, has said it would review the gas pricing formula if elected. " (as per a
National Newspaper)
Conclusion: More than Technicals, I trust to keep a keen eye on News and information because that will drive this stock.
Source: livemint.com, Economic Times, NDTV
