HDFC Bank Short Term Outlook Negative



The Savings account deregulation by RBI didn't went well with the banking stocks in general. Most of the banks with high CASA deposits fell 3 - 4% on the day when the overall market was up 2%. HDFC Bank was one such stock which fell around 4% on huge volumes of around 20 million shares on National Stock Exchange. The following Technical Chart depicts some of the key numbers which might help in your investment or trading decisions.

 
# Significant Resistance at 495 while support at 438
# The script closed at 468 levels just at the 50 Day moving Average of the stock.
# Stock closed down 4% on volumes that was 10 times more than the daily average volume.
 
Fundamentally the deregulation of Savings Account was a significant event for the banking industry as a whole. HDFC Bank with around 50% of total deposits as CASA deposits, is expected to bear the maximum brunt.

Hence Investors can avoid fresh entry into the stock at this point of time while traders can sell "out of the money call" of the November series with strict stop losses. The current premium of Rs 500 call is available at Rs 7. Traders can sell this call with a stop loss at Rs 9.



2 comments:

Amit Agarwal said...

The stock has corrected significantly since the InvestorZclub recommended a sell on it at 470 odd levels.

At the current market price of 420 as on 23rd Nov 2011, the stock is getting into attractive zone. Investors can give long on the stock if the stock corrects by 10 - 15% from current levels for a horizon of at least 1 year...

Amit Agarwal said...

The stock has corrected significantly since the InvestorZclub recommended a sell on it at 470 odd levels.

At the current market price of 420 as on 23rd Nov 2011, the stock is getting into attractive zone. Investors can give long on the stock if the stock corrects by 10 - 15% from current levels for a horizon of at least 1 year...

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