Telecom sector stocks zoom with RCom
Telecom stocks zoomed on Friday after the elder brother Mukesh Ambani cued buying of Anil Ambani’s Reliance Communication assets under its new but popular Reliance Jio brand. Jio inked definitive agreement to buy out RCom assets which would help RCom repay debts which currently stands at around Rs. 49,000 crore.
The stock of the fourth largest telecom by market share surged as much as 121 per cent in just four trading sessions on a closing basis. The stock of RCom had given a downward sloping trendline breakout at 13.70 levels with huge volumes and RSI bounce back from over sold zone. The second largest company Idea too surged 5.6 per cent in Friday’s session giving a trendline breakout at 107 levels with rising volumes. The stock has kind of given a cup and handle pattern breakout at the same levels on Friday depicting momentum going ahead. However, the largest and the third largest telecom by market cap, Bharti Airtel and Tata Communications respectively, have been consolidating in the recent sessions.
Going forward, the sector in general would see better days in 2018 after having digested one of its eventful years which saw easing out of the tariff war, recovery in top line and consolidation among major players. RCom may provide more innovative packages and diversification within the sector.