Indiabulls Housing Finance Stock Analysis and Future Outlook
Indiabulls Housing Finance Limited, a leading housing finance company in India, has recently shown signs of a potential reversal pattern in its weekly charts. Currently, the stock faces a resistance level at 230, but it has managed to break this resistance and is currently trading above it. According to preliminary analysis, buying IBULHSGFIN around 230 with a stop-loss (SL) at 170 and a target (TGT) at 350 might be advisable, although this is purely a subjective view and should not be considered as professional advice.
Company Overview and Performance
Indiabulls Housing Finance is engaged in the business of providing housing finance solutions. The company has experienced a decline in earnings over the past three years, with an average annual decline rate of -11%. Additionally, the share price has been highly volatile over the last three months, indicating potential risks for investors. Despite these challenges, the company continues to pay dividends higher than the industry/market average, which could be a positive factor for some investors seeking regular returns.
Recent Developments and Malpractice Allegations
In the recent past, there were allegations of malpractice against the company's management, which might have further affected investor sentiment. While no specific findings have been released, these allegations suggest a need for caution in assessing the company's future prospects. Long-term investors might want to reconsider their stance on Indiabulls Housing Finance in light of these issues.
Future Outlook and Recommended Action
Given the current market conditions and the potential for a double top formation at 133, it is prudent to stay away from Indiabulls Housing Finance for at least Q4 and Q1 reports. The expected market gap down on Monday could lead to a decrease in stock price. In terms of support levels, the first key level is at 110, and if the stock closes below this price, it might be a good opportunity to buy. However, if the stock continues to fall, the next support level would be around 90.
For long-term investors, it is recommended to focus on blue-chip stocks and invest in quality rather than quantity. Always remember that in the current market environment, investing in quality companies is more beneficial than engaging in short-term trading strategies. The market's response to government-led initiatives, such as demonetization, could have a significant impact on housing finance companies. While some believe that real estate prices may fall due to demonetization, it could potentially increase demand for housing, benefiting housing finance companies in the long term.
Conclusion
In summary, while Indiabulls Housing Finance shows some signs of potential turnaround, significant risks and uncertainties are present. Novice and cautious investors should avoid this stock for the near term and consider other quality stocks. Happy investing!
Disclaimer: This analysis is for informational purposes only and should not be considered as financial advice. It is always advisable to conduct thorough research and consult with a financial advisor before making any investment decisions.