DLF, Sunteck Realty: Stay cautious; realty index violates key support level

Realty index may slip up to 7 per cent if stays beneath 400 level

Despite negating previous support range of 409 to 406, the Nifty realty index was receiving accumulation close to 400 levels in the recent sessions. But, on Tuesday, the index slipped under 400 even when benchmark indices, BSE Sensex and Nifty 50 gained close to a per cent. 

Regrettably, there is now no major support except the last reversal mark which registered a new 52-week low at 365.75.

Barring Brigade Enterprises, every other realty stocks like DLF, Godrej Properties, Indiabulls Real Estate and Sobha trade beneath the key indicator of the 200-day moving average (DMA).The investor community wisely decide not to enter in stocks trading under the 200-DMA, as they broadly believe that stocks failing to stay over the crucial average have lost the positive strength and momentum.

Indiabulls Real Estate and Sunteck Realty have hit new 52-week low, with decisive volumes suggesting more downside is on the way. 

On Wednesday, shares of Indiabulls Real Estate gained over 3 per cent, while DLF, Godrej Properties, and Sunteck  Realty traded muted. 

Here’s the technical outlook of stocks amid Realty index flashing a breakdown structure:-

NIFTY REALTY INDEX

Outlook: Index may slip 5 per cent -7 per cent if stays below 400

The “Descending Triangle” breakdown may shove the index in the bear territory, if 400 is not defended. On the higher side, the hurdle of 420 remains a key level. Unless 420 is crossed, the trend is expected to stay near the bear zone. 

While the Relative Strength Index (RSI) succeeds in rising above the oversold territory, the stock price action is not assisting strength, as follow-up buying failed to overcome significant hurdles. The index may slip to 380-370 range, as per the daily chart. CLICK HERE FOR THE CHART

DLF Ltd (DLF) 

Likely target: Rs 300 (once the stock closes beneath Rs 345)

Upside potential: 13%

The current chart formation of DLF stock indicates weakness, as the “Double Top” neckline has been breached. The counter may see sell-off once it closes beneath Rs 345, the neckline of the pattern. Until then, Rs 345 acts as a support. A breach on the downside may take this counter towards Rs 300 levels.

At present, the stock is tussling to cross the 200-day moving average (DMA) positioned at Rs 362.20 levels.  The stock has simultaneous hurdles at Rs 380 and Rs 390 levels. The bears may run for a cover only when the stock defeats all these barriers. CLICK HERE FOR THE CHART

Sunteck Realty Limited (SUNTECK)

Likely target: Rs 280 and Rs 265

Upside potential: 11%-15%

The stock has been on a downward trend since September last year and continued to see weakness on every reversal. There are multiple hurdles for this stock located at Rs 380 and Rs 410, which unless crossed, the medium-term trend is anticipated to stay weak. Stock is forming “Lower High, Lower Low” pattern indicative of the bearishness.

Moreover, the momentum indicator, Moving Average Convergence Divergence (MACD) has fallen under the zero line, a signal of a negative momentum. Immediate hurdle comes to Rs 340, with stock price action leaning towards Rs 280 and Rs 265 levels.  CLICK HERE FOR THE CHART

Indiabulls Real Estate Ltd (IBREALEST)

Outlook: New 52-week low triggered fresh selling pressure.

Since April last year, the stock has been unable to overcome the hurdle of the 200-weekly moving average (WMA). It did make attempts, but the might sell-off pushed the counter even more lower. Now, following a new 52-week low yesterday, the trend has entered a fresh leg of selling pressure. Immediate hurdle for the stock is at Rs 65 and Rs 70. Only a close over Rs 75 may alter the negative stance. Next support for the stock is at Rs 40. CLICK HERE FOR THE CHART

Godrej Properties Ltd (GODREJPROP)

Outlook: Breakdown below Rs 1,225 may trigger a big sell-off 
 

Godrej Properties shares have three times taken support in the range of Rs 1,125 – Rs 1,235 starting from June last year. Thus, this level has become a decisive mark for the stock. 

If the stock falls beneath Rs 1,125 mark, a big sell-off may trigger medium-term downside in the stock leading the price fall to Rs 1,050 – Rs, 1000 levels. On the other hand, if the counter manages to breakout over Rs 1,260, the rally could see Rs 1,400 levels. CLICK HERE FOR THE CHART