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SWINGTraderIndia - Nifty Realty Index Analysis

June 24 2021 | Reading Time: 12 minutes
Nifty Realty Index – 349.45
The realty index has underperformed the market after a fall triggered in 2008 due to the subprime crisis in the global financial market. Similarly, it did nothing in the last five years from January 2017 to June 2021. It traded in the range of 170–370 in a volatile manner and underperformed the Benchmark index.


Also, it traded in a downward sloping parallel trendline from January 2018 to December 2020. And now, it is trading and holding above the upper band of the downward sloping channel.
From now onward, we believe this sectoral index is getting ready to move toward 440–460 levels (i.e., 25 –30% up from current level) in the next few months.
Our observations on higher time frame charts, i.e., weekly and monthly, are as follows:
  • Over a period of time, this index has started trending above the downward sloping trendline, along with a rise in average volume in sync with the price trend on weekly and monthly charts.
  • The range shift analysis of momentum indicator RSI suggests a change in trend to a bullish continuation pattern from a bearish pattern.
  • The index is trading and holding above the upward sloping trendline connecting the lows of 2016, 2017, 2018, and 2019.
  • The analysis of the ratio chart (relative strength chart) also indicates this sectoral index may outperform the benchmark index as it has given a breakout above the three-year downward sloping trendline and is currently trending around that trendline.( Refer second chart)
  • The index is trending above all key moving averages on daily and weekly charts which indicates bullish trend on both time frame charts. Further, another trend following indicator MACD is also trending above the central line with a positive crossover on weekly and monthly charts.
Thus, after considering the above technical parameters, we expect a bullish trend in the next few months. However, our bias may turn negative if this index breaches the level of 300 and starts trending below it.

What do you think? Please email us any questions or comments.

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