Top loser Realty index breaches 200-days EMA, frontliners drag

Realty sector became one of the major catalysts dragging the markets to multi-month lows. Nifty Realty index dropped below its 200-days EMA support level at 299.75. After hitting its all-time high at 375.15 on January 12, the index witnessed lower tops and lower bottoms, which is still on. The index also breached its multiple support range of 300-305 levels in Friday’s trade. This could also be termed as the Head & Shoulders breakdown.

DLF which holds 25.55 per cent weightage in the index tumbled 5.2 per cent in Friday’s trade on a closing basis. The stock on Friday breached its upward sloping trendline breakdown and 200-days EMA support level. India Bulls Real Estate, which holds 15 per cent in the index, was the second top loser in the index losing 4.8 per cent on a closing basis. The stock too broke down from the 200-days EMA with gap down opening, but remained volatile and has formed a Doji pattern which if is confirmed with positive closing on Monday may see a bounce back.

Technically, the Nifty Realty index holds immediate support at 287, followed by 275. While 260 would act as a major support. In case of reversal, we hold 301, followed by 313 as resistance.