Reliance Industries (RIL) stock has been a market under performer for quite sometime now and recently it is facing heavy declines as well. I’m dedicating this blog post to Reliance and will be going to address a few doubts that are going in your mind as of now.

Why has Reliance been declining so much?

To be honest, there isn’t any constructive reason as to why Reliance has been declining so much lately. However I do remember that on the day Reliance management had announced it’s first quarter 2010 results, there was a news circulating in the market that their KG basin gas production will not go up for at least the next 6 months or more. On hearing this news Reliance had started going downhill, perhaps some downwards move due to that news led to a panic sell off in the stock. The results announced by Reliance Industries was pretty good and at par with the estimates. So all I can tell you is there is nothing really wrong with the stock.

Should I hold or sell Reliance Industries?

Here’s the most important question that is up in our mind for a few days or say couple of weeks. My opinion here is to HOLD Reliance Industries stock. There is no point to sell Reliance in a loss, as of today this is one of the best company by fundamentals listed in the Indian stock market. There is no other company like Reliance to give a yearly profit of 15,000 – 16,000 crores. If such a huge profitable company cannot be a good purchase then what will be?

Reliance Industries has immense cash sitting in hand and therefore it has planned to invest about 25,000 crores in purchasing stakes in several companies in the next 2 years. It has already started it’s investment and within a matter of time we shall start seeing profits coming over from these investments in the balance sheet of RIL. So continue to hold Reliance Industries as I guarantee you that the stock is going to double from the current levels by 2012.

Should I buy Reliance Industries now?

Avoid fresh buying into Reliance Industries stock at the current levels. Reliance has broken all its major support levels and we really have no clue as to where the stock is heading to. Reliance could bounce back from current levels or even go further down to levels of 800. However if you find the stock between 800-850, then you can surely purchase at those kind of levels and hold it for a longer term to make good profits. Avoid fresh buying at the current levels and let the stock fall further. I’m sure we will get a even better entry to the stock than 920 per share, so why not wait and enter the stock at even better levels?

However remember that the long term view on Reliance is still very positive and there is no doubt that it will give good returns in future. All you have to do is to sit back and relax, RIL is one such stock that will not let you down ever!

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