Realty Check: Stocks from the real estate index can rally up to 25%

Most stocks in the real estate segment are set to add more gains in the coming sessions

The real estate sector has seen interest from traders and investors. Although it was hit hard by the pandemic, there are positive trends. The fear of a third Covid wave notwithstanding, real estate developers expect a 25 to 30 per cent jump in residential sales during the festive season. The reason being continued momentum in sales in the last couple of months due to stamp duty cuts in some states, lower interest rates, discounts and offers, demand for larger homes to accommodate work from home and so on. READ MORE

Amid this backdrop, the Nifty Realty index surged over 6 per cent on Wednesday, within kissing distance of its all-time high levels. Today, the index extended gains as it was hovering 0.50 per cent up in afternoon deals. Among specific names, the shares of Brigade Enterprises reached a new all-time high with stock prices soaring by 15 per cent in intra-day session. Those of Sobha, meanwhile, touched a new 52-week high. 

Can this momentum in real estate names last? Here is what tech charts are signalling:

 
NIFTY REALTY INDEX
Likely target:  460 and 515
Upside potential: 11% to 25%

The Nifty Realty index could see a breakout rally towards 460 and 515 levels from a medium-term perspective, monthly charts suggest. This uptrend is well supported by Moving Average Convergence Divergence (MACD), which stands comfortably above the zero line. In addition, the Relative Strength Index (RSI), currently trading in the overbought category, is showing no signs of weakness. The immediate support comes at 380 and 360 levels. CLICK HERE FOR THE CHART
               
DLF Ltd (DLF)
Likely target:  Rs 350 and Rs 365
Upside potential: 5.50% to 10%

The stock is not letting any weakness break its 100-days moving average (DMA), placed at Rs 295 levels, which is acting as medium-term support. The breakout above the said moving average in May had progressively added positive momentum, as per the daily chart. Now, the current trend suggests the stock is heading towards Rs 350 and Rs 365. CLICK HERE FOR THE CHART
 
 
Godrej Properties Ltd (GODREJPROP)
Likely target: Rs 1,700 and Rs 1,800
Upside potential: 6.50% to 12.50%

Since July, shares of Godrej Properties are upholding the support of 100-DMA, currently at Rs 1,425 levels. Now, as the stock has decisively conquered the 50-DMA, with strong volumes placed at Rs 1,507 mark, the upside bias may see a rally towards Rs 1,700 and Rs 1,800 levels. The counter may even hit a new all-time peak. Furthermore, the MACD is attempting to cross the zero line and if that occurs, the direction and momentum are likely to see added interest from market participants. CLICK HERE FOR THE CHART
 
 
Brigade Enterprises Limited (BRIGADE)
Likely target: Rs 420 and Rs 450
Upside potential: 16% to 25%

After hitting a new all-time high of Rs 385, if the shares of Brigade Enterprises continue to dominate above Rs 360, the upside breakout may see a move towards Rs 420 and Rs 450 levels, according to the weekly chart. The said breakout was also supported by strong volumes, reflecting the interest of market participants. Add to this, the trendline breakout on the stock price along with the technical indicator MACD, which managed to cross the zero line, suggest a firm up move in the coming sessions. CLICK HERE FOR THE CHART
 
 
Sobha Ltd (SOBHA)
Likely target: Rs 780 and Rs 850
Upside potential: 15% to 20%

Sobha shares have entered the next phase of the bull run on conquering Rs 688 levels. This move emerged after a decisive breakout around the Rs 550 mark, which was supported by the 200-weekly moving average (WMA). In the next phase, the stock seems to be headed towards Rs 780 and Rs 850 levels. The immediate support comes at Rs 650 mark, as per the weekly chart. CLICK HERE FOR THE CHART