The real estate sector has long been recognised for its volatility in the stock market. Realty stocks tend to move aggressively in either direction—rallying or falling by 20-30% in a single move when in trend. However, the same level of intensity can be expected in reversal moves, with stocks bouncing back in a similar manner regardless of the benchmark index’s performance.
Among the premium realty stocks currently showing signs of a trend reversal are DLF Ltd. and Godrej Properties Ltd., both of which display technical patterns that point toward a possible upward trajectory.
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DLF Ltd. is one of India’s largest and most renowned real estate companies, with a diverse residential, commercial, and retail portfolio. Known for its high-quality developments and strong presence in major cities, DLF has established itself as a key player in the Indian real estate market.
DLF daily chart
Source: TradePoint, Definedge Securities
DLF’s stock price has seen a significant correction in the past 10 months, sliding from an all-time high of Rs. 967 to Rs. 650. This correction represents a decline of nearly 33%, which many investors may see as a sharp pullback.
A Megaphone pattern has formed on the daily chart, which is often considered a signal of potential price reversals. This pattern, also known as an expanding triangle, is characterised by increasing volatility, where the price swings in both directions before eventually consolidating into a new trend.
The stock price has currently reversed from the support zone of Rs.653 and is approaching the Rs.700 mark. The immediate resistance level is positioned at Rs. 800, representing a potential upside of over 15% from the current price of Rs. 690.
The positive divergence on the Relative Strength Index (RSI) adds further conviction to the reversal. The RSI, at the support level of the Megaphone pattern, is showing a bullish divergence, indicating that the downward momentum is weakening and buyers could start to gain more influence. This signals that the probability of a reversal is high, making DLF a stock worth watching in the coming months.
2. Godrej Properties Ltd.
Godrej Properties Ltd. is another top-tier player in the Indian real estate market.
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