HDFC - Can The Stalwart Hold On - A Technical Review

HDFC Bank or better known as the Excel Sheet bank given its penchant to give out 20% growth figures year in year out has come under some kind of attack in the past month post its results (Not the George Soros type attack before everyone loses their minds)

Lets just look at a technical perspective on the long term charts of HDFC Bank, here below you would find a monthly and weekly chart of the bank and it clearly shows that the bank has been in some sort of broad range between 1700-1300 (give it close to 3 years, for the ones asking)

The stock currently trades precariously close to its 200 Weekly Moving average at around 1448, a break below this level on a weekly closing basis opens the gateways to supports closer to 1320-1340 on the downside. Again, i am not stating that it would happen immediately but one needs to be open to the idea that a break below the 200 weekly moving average is a haunting perspective for the stock.

On the monthly charts, 1300 emerges as a strong support for the bank and personally would be a great buying area or atleast an area where I would want to personally deploy some funds. Remember, a decisive break below 1210-1220 levels opens the outside possibility for the stock to hit 3 figures.

What should you do?

A strong buy for the counter emerges around 1320-1330 levels for the ultra long term, deploy some cash at that moment. Even for a swing trade, wait for 1330-1320 levels to go long with a strict stop loss near the 1270-1250 levels for a retest of 1510 level on the upside
For my fellow bears, the pattern of the stock on the charts is such that every rally could become a shorting opportunity, wait patiently for the stock to recover a little and then SELL!

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