April 10, 2019 / 7:44 AM / 2 months ago

BUZZ-India's Nifty realty index beats NSE this year; trades near resistance

** India’s Nifty realty index, which gauges performance of real estate stocks such as Sobha Ltd and Godrej Properties Ltd, has gained nearly 18 pct this year as of last close, outperforming the broader NSE Index’s 7.5 pct rise

** The index on Wednesday cut above a key resistance at 279.4, the Aug 20, 2018 high which is also the crest of wave 4 of a higher degree wave (A), though it needs to close above this level

** An analyst at a domestic brokerage, who did not wish to be named, says there are multiple triggers at play – successful IPO of Embassy Office Parks REIT raised hopes that others could also come to market to raise money; secondly March sales figures came out well above expectations even as they expected it to be weak post GST rate cut

** Hopes of present govt coming back to power also boost sentiment, as continuation of current policies will be beneficial, the analyst says

** On the positive side, index formed a golden cross on Monday, where in its 50-day exponential moving average (EMA) crossed above its 200-day EMA

** Though the index is expected to face strong resistance near 286.7, the 50 pct Fibonacci retracement level of the downtrend from Jan 12, 2018 high to Oct 11, 2018 low (wave (A))

** Resistance is also expected in the near term as some of the momentum indicators such as RSI are now in the overbought zone and chances are that it may start showing divergence from the prices, seen as a bearish sign

** Trend intensity (TI) indicator has also started to decline from a high of 45, which suggests the uptrend is losing steam

Reporting by Gaurav Dogra and Krishna V Kurup

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