Reliance Communications Ltd Surges to Upper Circuit Amid Strong Buying Pressure

Strong Buying Pressure Drives Upper Circuit

On the trading session of 1 Feb 2026, Reliance Communications Ltd’s stock price ascended from an intraday low of ₹1.03 to a high of ₹1.11, the maximum permissible price band for the day, triggering an automatic upper circuit freeze. The stock’s 5% price band was fully utilised, reflecting a surge in demand that overwhelmed available supply. Total traded volume reached 10.43 lakh shares, with a turnover of ₹0.11 crore, underscoring active participation despite the company’s micro-cap status.

The upper circuit hit is indicative of strong investor enthusiasm, often driven by speculative interest or positive triggers. However, in this instance, the rally followed two consecutive days of decline, suggesting a potential trend reversal. The stock outperformed its sector, which declined by 0.31%, and the broader Sensex, which gained a modest 0.19% on the same day.

Technical and Market Context

From a technical standpoint, Reliance Communications Ltd’s last traded price (LTP) of ₹1.11 is above its 5-day and 20-day moving averages, signalling short-term bullish momentum. However, it remains below the longer-term 50-day, 100-day, and 200-day moving averages, indicating that the stock is still in a broader downtrend and has yet to establish sustained upward momentum over the medium to long term.

Interestingly, delivery volume on 30 Jan 2026 was 4.99 lakh shares, down sharply by 57.74% compared to the 5-day average delivery volume. This decline in delivery volume suggests that while trading volumes surged, actual investor participation in terms of shares held overnight has diminished, pointing to a possible increase in intraday speculative trading rather than long-term accumulation.

Market Capitalisation and Sector Performance

Reliance Communications Ltd is classified as a micro-cap stock with a market capitalisation of approximately ₹306.97 crore. The company operates within the Telecom - Services industry, a sector currently facing multiple headwinds including intense competition, regulatory challenges, and evolving technology demands. Despite these pressures, RCom’s stock managed to outperform its sector peers by 4.92% on the day, a notable achievement given the sector’s overall negative return.

This outperformance may be attributed to short-term speculative interest or anticipation of company-specific developments. However, investors should remain cautious as the company’s Mojo Score stands at 3.0 with a Mojo Grade of Strong Sell, recently downgraded from Sell on 13 Jan 2025. This rating reflects ongoing concerns about the company’s fundamentals and outlook.

Regulatory Freeze and Unfilled Demand

The upper circuit hit triggered an automatic regulatory freeze on further trading in Reliance Communications Ltd shares for the remainder of the day. Such freezes are designed to curb excessive volatility and allow the market to absorb new price levels. The freeze also indicates that demand for the stock exceeded supply at the ₹1.11 price point, leaving a significant unfilled buy-side interest.

Unfilled demand at the upper circuit often signals strong bullish sentiment among traders and investors, but it can also lead to sharp corrections once the freeze is lifted if the buying momentum is not sustained. Given the stock’s recent trend reversal after two days of decline, market participants will be closely watching subsequent sessions for confirmation of a sustained uptrend or a potential pullback.

Investor Considerations and Outlook

While the upper circuit hit and strong intraday gains may appear encouraging, investors should weigh these developments against the company’s broader financial health and sector challenges. The downgrade to a Strong Sell rating by MarketsMOJO reflects concerns over Reliance Communications Ltd’s earnings quality, competitive positioning, and growth prospects.

Moreover, the stock’s position below key long-term moving averages suggests that any rally may be vulnerable to resistance and profit-taking. The sharp decline in delivery volumes also hints at reduced conviction among long-term holders, with trading activity possibly driven by short-term traders seeking quick gains.

Given these factors, investors are advised to exercise caution and consider alternative telecom stocks with stronger fundamentals and more favourable technical setups. Monitoring upcoming quarterly results, regulatory announcements, and sector trends will be crucial in assessing the sustainability of RCom’s recent price action.

Summary

Reliance Communications Ltd’s stock hitting the upper circuit limit on 1 Feb 2026 highlights a day of strong buying interest and a potential short-term trend reversal. The stock outperformed its sector and the Sensex, closing at ₹1.11 with a 4.72% gain. However, the broader technical picture and fundamental ratings remain weak, with a Strong Sell Mojo Grade and declining delivery volumes signalling caution. The regulatory freeze following the upper circuit hit underscores unfilled demand but also limits immediate trading activity. Investors should carefully analyse these mixed signals before making investment decisions in this micro-cap telecom services stock.

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