Has Nifty Realty lost its charm?

The momentum oscillators and indicators show a bearish picture and the near future looks cloudy.

The NIFTY Realty Index is designed to reflect the performance of real estate companies that are primarily engaged in the construction of residential and commercial properties. The index constituents of 10 stocks and the rescheduling of index constituents happen bi-annually every year. DLF Ltd and Godrej Properties Ltd constitutes the highest weightage of 25% and 18% in the index, respectively.

The index has shown a dismal performance last week and plunged about 2.45% during the week. It was also one of the weaker sectors during the week. It has formed a red candle with a long body, which indicates a sell-off in the sector. Moreover, in the last seven days, the index has lost about 7% and is below 20-DMA, 50-DMA, and 100-DMA. The index has recorded a lower high which indicates a bearish sentiment. The technical parameters also hint towards the weakness, with 14-period daily RSI place just above 40. The trend indicator ADX is rising above 17 is a problem for the index, as rising ADX indicates a strong trend strength. Along with this, the MACD line is below the signal line and zero line. Daryl Guppy’s Multiple Moving Average (GMMA) shows a bearish setup of the index. Overall, the momentum oscillators and indicators show a bearish picture and the near future looks cloudy.

According to the technical chart, the level of 450 happens to be strong support and is an upward sloping trendline breakdown level. The index falling below shall see a free fall towards the level of 435, which is its 200-DMA. In case of any upside, the 475 level happens to be the first line of resistance, followed by 480 which is its 20-DMA. Any rise above 480 will indicate bullishness. However, with poor last week, this upside looks highly unlikely. Traders having long positions should consider reviewing their trades accordingly and wait for better clarity of the trend.