RIL Results Trading

Results Trade in RIL

First of all Reliance Ind has been rangebound for several months now bouncing between -1900 to 2000+. Somewhere sometime back I had read a news that Reliance getting good margins on its petro product porfolio due to increase in crude prices. I had this news in the back of my mind as quarterly results were round the corner. When Reliance came closer to the lower end of the range, I started accumulating it in the 1900-1950 range hoping for a bounce around results declaration

This worked for me, as soon as the result date was announced, Reliance spiked from 1900 to 2000. I was sitting on good profit on my position. One day before the results I wanted to check market positioning, because I was sitting on good profits and wanted to retain it.
Analysing option chain data for Reliance, I observed that lot of unwinding was going on in ITM calls and lot of OI build up was happening in ITM puts. This clearly signalled me that RIL is likely to go down post results. I exited my position at 2000

Next day there was again an announcement in RIL about the Aramco deal in progress and RIL went upto 2024-2032 range which was used for a sell off and sure enough, post results RIL saw a sell off although results were good and petrochem division indeed did good this time, overall profit was below expectations and RIL went back down close to 1920. Turned out to be a very good trade for me combining all aspects news, fundamentals, options data and technicals.

Aramco deal news trap

Note that I strongly believe that periodic Aramco deal news is being used by large institutions and news media to trap retail into buying RIL at higher prices. So be careful! Notice how these news items were flooded just before the results with a spike in price, RIL was then dumped just before results and all the news on Aramco deal also disapperaed with no further updates.

Next time you start seeing lot of updates and news on RIL Aramco deal, it is actually time to sell and not to buy. However one excellent news pending in RIL is the launch of affordable smartphone in collaboration with Google Pixel. Most likely the announcement will come in the next AGM which usually takes place around July. It would be an excellent strategy to accumulate RIL before AGM and then sell on any spike around AGM. I will use next two months to accumulate RIL and will exit on final announcement of the launch of affordable smartphone.