Friday was a great session for the bulls as the RBI’s 50 bps rate hike decision seemed to have instilled confidence in bulls, amid a continuous selling spree from the last few sessions. While many stocks recovered from their lows, the real estate sector was one of the most buzzing ones. The index ended the session 1.97% up at 424.
Indiabulls Real Estate (NS:) was the top-performing constituent of this index which holds a weightage of around 4.32%. It is a small-cap real estate developer with a market capitalization of INR 3,905 crores. FY22 turned out to be a loss-making year for the firm as it recorded a net loss of INR 136.72 crores over a revenue of INR 1,541.37 crores.
Image Description: Daily chart of Indiabulls Real Estate with volume bars at the bottom
Image Source: Investing.com
On Friday, the share price of Indiabulls Real Estate surged 7.46% on the NSE to close the session at INR 77.75. The stock had been falling consistently after it made a high of INR 94.5 in the first week of September 2022. The fall from there was quite sharp and the stock touched a low of INR 70.9 before the end of September 2022. However, Friday’s rally seems to be depicting a reversal from here as this was the strongest move the stock had given so far which is indicating buyers are now kicking in to capitalize on these lower prices. The volume for the day was recorded at 16.2 million shares which is 106% higher than the 10-day average volume of 7.84 million shares.
Another good thing about Friday’s session was that the stock surged past its falling trendline resistance on the daily chart and more importantly, gave closing above it. This trendline breakout is an early warning of a trend reversal from the current levels and the higher-than-average volume behind the move is further increasing the confidence.
The stock could now continue its move on the upside and may travel to the previous swing high of INR 94.5 in the near term. There is some resistance around INR 80 which would be the first hurdle it needs to cross. On the downside, there is a good base being formed before the up move, at around INR 71 – INR 70.5 which would now act as a strong support zone. A fall below this level would negate the relevance of the trendline breakout.
