Buy DB Realty with a trading perspective. The downtrend in the stock halted at the key support at Rs 50 in late June 2013. Since then it has been in a medium-term consolidation phase in the band of Rs 50 and Rs 60. Within this sideways move, the stock formed an ascending triangle pattern. This is a bullish reversal pattern. The upper boundary of this pattern at Rs 60 provided resistance to the stock. After repeatedly testing this level, the stock decisively broke through it on Tuesday, gaining 8 per cent. The volume was good in this session. The stock has also emphatically breached its 21 and 50-day moving averages, implying bullish momentum. Momentum indicators in the daily chart are giving positive signals. The relative strength index (RSI) in the daily chart has entered the bullish zone from the neutral region, signalling upward reversal in the short-term. The daily moving average convergence divergence indicator is also moving higher in line with the stock’s price since early August.
Short-term outlook for the stock has turned bullish. It has the potential to trend upward and hit the target of Rs 64.5 or Rs 66.5 in the ensuing trading sessions. The stop-loss should be placed at Rs 60.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)