Real Estate was down and out sector even before demonetization but then RERA and demonetization broke the back of the Real estate market. It became completely toxic and avoid sector from an investment perspective. But then as we say: It's always Darkest before Dawn. And Investors always look at things differently and all they were waiting for: the beginning of the twilight before sunrise...trigger
Fundoo Trigger: REIT and that changed the sector from bad PE to Good PE
1. SEBI first allowed MF to invest in REIT in January
2. IRDA allowed Insurance companies to invest in REIT in March
3. RBI allowing Banks to invest in April
As an investor, you have to recognize the change to take advantage of it.
One sector in India where there has been pretty visible breakout in stocks with huge volumes: Real Estate
All Bad news priced in?
— Deepak Singh (@smarket) March 23, 2017
All you have to do - Scan the Price Action and it tells you how the morning is shaping up. It all started back in March when first Bangalore based real estate stock Brigade Enterprise broke out. This is what it did post breakout:
And then Godrej Properties between 15-30 March 2017
And then Indiabulls Real Estate in April 2017
And the latest stock to make a big move: Bombay Dyeing. I covered Godrej Properties back then when it was breaking out and explained this whole logic. Godrej Properties turned out to be clean break out and now stock is up 55%
It's a great case study to understand how Price Action helps one take position even in a sector where optically things look down and out on hope that a new day has begun and sector will get sufficient sunlight.
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers