Key Highlights

  • Reliance Worldwide Corporation (ASX:RWC) surged 24.65% to close at $4.50, reaching its highest level in more than a year.
  • RWC has broken above the neckline of a potential Inverse Head & Shoulders pattern around $3.94.
  • The breakout is supported by a prominent Rising Window and a major spike in trading volume, with approximately 18.22 million shares traded versus average Volume of around 3.18 million.
  • The chart indicates an initial upside objective around $4.86, followed by a higher technical target near $5.09.
  • Brookfield has submitted a fourth Takeover proposal at $4.75 per share in cash, valuing RWC at approximately $4.1 billion.
  • FY2026 Earnings were affected by a $103.3 million write-down related to the closure of an Asia Pacific metals Manufacturing facility, while US tariffs and higher copper prices also pressured profitability.

Reliance Worldwide Corporation Limited (ASX:RWC) has produced a major technical Reversal following a prolonged decline and several months of consolidation. The latest session saw the stock surge 24.65% to $4.50, breaking decisively above the $3.94 neckline of a potential Inverse Head & Shoulders pattern.

The breakout is accompanied by a Rising Window and exceptionally strong trading volume, providing substantial confirmation of renewed buying pressure. The move also follows Brookfield's latest $4.75-per-share takeover proposal, which has provided a significant near-term catalyst for the share price.

Stock Fundamental Part

Reliance Worldwide is a global manufacturer of plumbing and water-control products, with operations across the Americas, Asia Pacific and EMEA. The company has been navigating weaker demand, US tariffs and elevated copper costs, creating a challenging earnings environment. Its HY26 results showed net sales declining 4.6% to US$645.4 million and adjusted NPAT falling 31.3% to US$52.2 million.

The company has also been undertaking manufacturing footprint rationalisation. In June, RWC announced the planned closure of its Melbourne metals operations, with the restructuring expected to deliver an annual operating earnings uplift of approximately US$9 million by the end of FY27.

The most significant recent catalyst is Brookfield's fourth takeover proposal of $4.75 per share in cash. RWC has granted Brookfield access to Due Diligence for up to eight weeks, although there is no certainty that a binding transaction will ultimately be reached.

The takeover proposal provides a strong valuation reference above the latest closing price of $4.50, while the company's manufacturing optimisation and tariff-mitigation initiatives could provide additional support to its longer-term earnings profile.

Associated Risks

Despite the powerful technical breakout and takeover catalyst, several risks remain.

The Inverse Head & Shoulders breakout is relatively recent, meaning RWC needs to sustain trading above the $3.94 neckline to confirm that the move is genuine. A sustained decline back below this level would weaken the bullish setup and increase the risk of a failed breakout.

The takeover proposal also introduces significant event risk. Brookfield's $4.75 offer is indicative and non-binding, and there is no certainty that a binding agreement or completed transaction will result.

Fundamentally, RWC continues to face challenges from US tariffs, copper prices and end-market demand. HY26 adjusted EBITDA declined 22.5%, while management had estimated a FY26 net Tariff impact of US$25–30 million.

The company is also exposed to housing and renovation activity, manufacturing costs, foreign-exchange movements and execution risks associated with its ongoing manufacturing footprint rationalisation.

Technical Outlook

RWC's Daily Chart has developed a potentially important bullish reversal following a breakout from a well-defined Inverse Head & Shoulders pattern.

RWC's Daily Price Chart (at the closing price of 18/08/2026). Powered by: tradingview.com.

  • RWC has completed a potential Inverse Head & Shoulders pattern following several months of consolidation after a prolonged decline. The formation suggests that the previous bearish trend has weakened substantially.
  • The stock has broken above the $3.94 neckline with a powerful 24.65% advance, providing confirmation that buyers have regained control of the short-term trend.
  • The breakout is accompanied by a prominent Rising Window, reinforcing the strength of the bullish move and creating an important reference area for subsequent price action.
  • Trading volume surged to approximately 18.22 million shares compared with average volume of around 3.18 million, providing strong confirmation of the breakout.
  • The first major upside objective is around $4.86, representing potential upside of approximately 8.0% from the latest closing price of $4.50.
  • A higher technical objective is around $5.09, equivalent to potential upside of approximately 13.1% from the latest close.
  • The $3.94 neckline now represents an important support zone. A sustained move below this level would weaken the bullish pattern and raise the risk of a failed breakout.

Bottom Line

Reliance Worldwide's recent earnings have been challenged by tariffs, weaker Demand and restructuring costs, but manufacturing optimisation and tariff-mitigation initiatives could support the longer-term outlook. The latest $4.75-per-share Brookfield takeover proposal provides an additional near-term catalyst, although its outcome remains uncertain.

Technically, RWC has broken decisively above the neckline of an Inverse Head & Shoulders pattern at $3.94, supported by a Rising Window and an exceptional spike in trading volume. As long as the stock holds above the breakout zone, the bullish setup remains intact, with $4.86 representing the initial upside objective and $5.09 the higher technical target.