DLF bounces from trendline support

The stock of DLF Limited had formed a spinning top candlestick pattern as of March 25, 2020, and thereafter, witnessed gradual higher tops & higher bottoms. However, from a high of Rs 175.10, which was registered on October 22, 2020, the stock has witnessed a nearly 14 per cent correction.

The correction is halted near the upward sloping trendline support while the stock has initiated its northward journey. The upward sloping trendline was formed by connecting swing lows from March 25, 2020. Further, the stock has formed a sizeable bullish candle, which suggests that the bulls are taking control near the short-term support. The buying volumes are higher than the last five days’ fall, which indicates that it is accumulated by smart investors at a lower level.

Talking about the indicators, the leading indicator i.e. the 14-period RSI has taken support in the zone of 42-40 and it is on the verge of giving a positive crossover. Further, the stochastic oscillator has given a positive crossover in the oversold region, which suggests a positive momentum.

Going ahead, we expect the bias to remain positive as long as the stock sustains above Thursday’s low of Rs 150.60 level. On the higher side, the 200-day EMA level is likely to act as an immediate resistance, which is currently placed at Rs 162.32 while the major resistance is placed in the zone of Rs 166-Rs 167 level.

On Friday, the stock of DLF closed at Rs 158.30 per share, higher by 3.40 per cent from its previous close. The stock opened at Rs 153.10 per share and hit an intraday high of Rs 159.30 and a low of Rs 152.50 per share on NSE.