DLF Stock Signals Bullish Reversal: Can It Reach ₹840?

DLF Stock in Focus

CNBC-TV18’s ‘Chart of the Day’ highlights a potential breakout in DLF, a major real estate player based in Gurugram. Technical analyst Sacchitanand Uttekar of Tradebulls provides his insights on the stock’s movement.

Inverse Head and Shoulders: A Bullish Sign

After a sustained downtrend since October 24, DLF’s recent price action suggests a possible reversal. The stock has formed an inverse head and shoulders pattern, a classic bullish reversal signal in technical analysis. This pattern usually indicates a shift from a downtrend to an uptrend, signifying weakening bearish momentum and growing buying interest.

The breakout above the neckline of this pattern, accompanied by increasing trading volume, further strengthens the bullish outlook. This breakout confirms the reversal and suggests that DLF’s price is likely to rise.

ADX Confirmation and Target

Adding to the bullish sentiment, the Average Directional Index (ADX) has crossed above the 25 level, confirming the emergence of a strong uptrend. The right shoulder of the inverse head and shoulders pattern is also notably higher than the head, invalidating the previous bearish structure.

The stock has already experienced a significant price increase following the breakout, reinforcing the reliability of the pattern. Analysts suggest potential buying opportunities on any dips from current levels. The target price is set at ₹840, while the stop-loss level is placed below ₹710.

DLF’s Recent Performance

On Thursday, DLF shares closed with minimal change at ₹776.7. However, the stock has witnessed a 13% surge in the past month, highlighting its positive momentum.