Indiabulls Real Estate gives pennant breakout

Considering the daily timeframe, the stock of Indiabulls Real Estate has given a pennant pattern breakout on the daily timeframe. The height of the pennant’s pole is almost 16 points. This breakout was confirmed by the robust volumes. Additionally, the stock had formed a bullish opening Marubozu candle on the breakout day, which indicates extreme bullishness.

The pennant is a short-term trend continuation pattern and has conical bodies that were formed during a period of consolidation. Price consistently reaches higher lows and lower highs, creating two converging trendlines that forms this conical shape. The breakout above the downward sloping trendline signals that the previous uptrend has resumed.

Currently, the stock is trading above its short and long-term moving averages. Talking about the indicators, the daily RSI, during the formation of the pennant pattern, has bounced exactly from the zone of 62-60 mark, which indicates that the stock is in a super bullish range as per the RSI range shift rules. The daily MACD stays bullish as it is trading above its zero line and signal line.

Further, the trend strength indicator, average directional index (ADX) is at 35.07 on the daily timeframe, which indicates strength. The +DI is much above the -DI. This structure is indicative of the bullish strength in the stock.

Going ahead, as per the measure rule of the pennant pattern, the first resistance for the stock is placed around Rs 67.30, followed by Rs 76. On the downside, supports are seen around Rs 60.75-Rs 59.50 levels as it is a confluence of 8-day EMA and the upward sloping trendline support.

On Friday, the stock of Indiabulls Real Estate surged by 6.94 per cent and closed at Rs 64.75 per share. The stock opened at Rs 60.80 per share and hit an intraday high of Rs 66.75 and a low of Rs 60.75 per share on NSE.