Technical Analysis

Sobha (₹545.9): Buy

Yoganand D BL Research Bureau | Updated on May 24, 2018 Published on May 24, 2018

The stock of Sobha has jumped 5.5 per cent with above average on Thursday, breaching its 21- and 50-day moving averages decisively. Investors with a short-term view can consider buying the stock at current levels as the bullish momentum is picking up.

Following a near-term decline, the stock found support at ₹490 levels and rebounded strongly. Since taking support at ₹490, the stock has gained more than 10 per cent in the last two trading session. Moreover, the stock has formed a bullish engulfing candlestick pattern at the key support level, which is a bullish reversal pattern.

The long-term uptrend is intact in the stock. The daily price rate of change indicator has entered the positive territory implying buying interest while the weekly price ROC is on the brink of entering the positive territory. Both the daily and weekly relative strength indices are charting higher in the neutral region towards the bullish zone.

Although the stock tests a key resistance at ₹550 levels, it has the potential to break above this level eventually after a minor pause. The stock hovers well above its 50- and 200-day moving averages.

With current bullishness, the stock can extend its rally and hit the price targets of ₹568 and ₹580 in the short term. Traders can buy the stock with a stop-loss at ₹534.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get

This article is closed for comments.
Please Email the Editor