Top/Down Take: Indiabulls Real Estate (IBREALEST)

JC Parets
July 13, 2021

One of the processes we absolutely love to follow is the Top/Down Analysis approach. In this process, we identify the larger trend and then zoom in and analyse the characteristics that stand out. We look at the asset classes, identify the strongest one, and then deep dive. Next, we look at sectors and identify the pockets of outperformance. Finally, we take a look at an actionable trade that suits our risk and reward parameters.

So let's see what we have this time around!

Step 1 is to look at the stock universe that we follow. Nifty 500 has been moving sideways for a while and has generally been messy. While that has been the immediate short-term trend, when you look at the bigger picture, the index continues to make higher highs and higher lows.

Click on chart to zoom in

Even in a messy market, there are certain pockets of strengths and weaknesses. Today we're taking a look at a sector that's displaying strength among others.

Nifty Realty has been up to something and we've been keeping an eye on it. Nifty Realty is currently trading above its 2018 highs and that's worth mentioning. Remember, it was in 2018 when risk-on assets peaked out and small caps and mid-caps started their decline. For these reasons, a move above 2018 is of great significance.

We know the week isn't even halfway through, but we're sharing this chart to paint a visual image of what this trend could mean if it sustains. If the price manages to hold on above the levels of 370, Realty will be back as the frontrunner in terms of outperforming sectors. While there are several pause points in between, the next major target to track would then be 520.

On a relative basis, Nifty Realty hasn't done much in terms of a big-picture move. But the most recent uptick has been accompanied by strength in the indicator as well. The indicator is now in the bullish momentum regime, but it'll take a whole lot of strength to get past an almost decade-long downward sloping trendline.

This one's gotta be on the radar as well! For now, seems like something is brewing.

It's time to take a look at the stock that has made its way to this analysis.

Indiabulls Real Estate used to be one of the stocks that I used to steer clear of when I started trading in 2017. Seems like the right decision when you look back now!

But now, the trend seems to be attempting to make a reversal! It's nice to see such full-circle transformations. Of course, assuming this breakout and follow-through holds.

The price has moved out of an almost four-year big base, with the current move. The indicator is back in the bullish momentum zone and adds strength to the narrative. It seems like the overhead supply at 125 has been absorbed.

We are bullish only if the price sustains above the risk management level of 125. The next target would be 180.

Nifty Realty definitely looks very interesting at this stage. We're going to keep tracking this space to see if any more ideas come through.

Thanks for reading and please let us know if you have any questions!

Allstarcharts Team

Filed Under: