Stock of the week - Sobha Limited For Target Rs.1177 By GEPL Capital
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Sobha Limited
Observation
* SOBHA on the monthly time frame has been forming a higher high higher low pattern since June 2020, indicating that the long term trend of the stock is strongly bullish.
* In the week that passed by the stock resumed its up move after a 3 week correction that halted near the 20 Week SMA. We witnessed A-B-C pattern breakout with volume confirmation, indicating strong participation in the up move.
* The Bollinger bands plotted on the daily time frame can be seen expanding as the prices move higher, indicating expanding volatility as the prices move towards fresh 52 week highs.
* On the indicator front the RSI plotted on the weekly chart moved above the 50 mark in the month of October 2020 and has managed to sustain above the same ever since, indicating presence of bullish momentum in the prices.
* Going ahead the 1085 (50% extension level of 120-901 projected from 694 levels) is going to act as a resistance level, if the prices breach above the 1050 mark we might see the prices move higher towards the 1177 (61.8% extension level of 120- 901 projected from 694 levels).
* The 850 (Multiple touch point level) will act as a support level, post which we might see the prices move lower towards 700 mark (20 Week SMA).
Inference & Expectations
* SOBHA from a long term perspective seems to be in a strong bullish trend.
* The technical parameters and the indicators mentioned above, point towards the possibility of increasing bullish momentum in the trend.
* We expect this momentum to take the prices towards 1085 followed by 1177 eventually.
* On the downside the 850 mark will act as a support level if the 850 level is breached we might see the prices move lower towards 700 mark.
* One can buy SOBHA at current levels with a target of 1085 and 1177 with a strict stop loss of 850 on closing basis.
Sobha Limited. LTP : ₹950.60 Target: ₹1177 Stop Loss : 850
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