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The outlook for the stock of Sobha is bullish. The stock surged 3 per cent on Tuesday and closed on a strong note.
This strong upmove has broken the narrow sideways move between ₹415 and ₹438 within which the stock was stuck for more than a week. Though there is a resistance near current levels at ₹449, the stock is likely to breach this hurdle.
Such a break will strengthen the current upmove. It will also confirm the formation of an inverted head and shoulder pattern on the chart. This is a bullish reversal pattern. The stock can then move up initially to ₹457.
A further break above ₹457 will then boost the momentum and will take the stock higher to ₹475 or even ₹500 over the short term. Traders can go long at current levels. Stop-loss can be placed at ₹430 for the target of ₹490. Revise the stop-loss higher to ₹455 as soon as the stock moves up to ₹465. Support for the stock is at ₹435. A break below it will negate the bullish outlook and will drag the stock lower to ₹415 and ₹400.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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