Reliance, HDFC Bank On Breakout Watch As Q2 Results Near, Says SEBI Analyst

With Q2 earnings season heating up, SEBI-registered analyst Financial Sarthis has identified two Nifty heavyweights, Reliance Industries and HDFC Bank, as potential breakout candidates. 

Both stocks are showing early signs of accumulation on the charts, with key technical levels being tested just as they prepare to unveil their September quarter results.

Breakout radar: Reliance Industries (RIL)

Financial Sarthis noted that Reliance stock tested its critical Anchored Volume Weighted Average Price (AVWAP) level, a significant resistance level that’s capped rallies for weeks. Also, the buying volumes have been inching higher, which is an early sign of accumulation ahead of earnings.

AVWAP is a technical indicator that is used to provide a customized, event-based perspective on market value and momentum for a particular stock. 

Reliance Industries is set to report its September quarter report on Friday, and the street is expecting a strong quarter again. 

According to the analyst, a close above ₹1,400 can trigger momentum toward ₹1,420–1,440. But a fall below ₹1,370 would weaken the momentum. 

They concluded that the bulls are showing strength, but confirmation is needed above the closing AVWAP. With earnings imminent, volatility is on the cards, either a potential breakout or a fakeout.

RIL shares have risen 15% year-to-date (YTD).

Breakout radar: HDFC Bank 

The other breakout stock on their radar is financial heavyweight HDFC Bank. 

Financial Sarthis highlighted a small flag & pattern breakout. The stock closed above 61.8% levels on Thursday and has seen good volumes over the last few days, showing signs of accumulation. 

India’s largest private sector bank is set to report its Q2 earnings on Saturday, October 18. The street is expecting a subdued show as higher credit costs and the full impact of the June repo rate cut are likely to put pressure on its margins. 

According to the analysts, a close above ₹998 can push HDFC Bank stock to ₹1,017 and ₹1,037.  

HDFC Bank shares have gained 12% YTD.

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