Analysis Background
Bank-nifty has taken the worst hit in the ongoing Ukraine – Russian crisis and the largest contributor to the downfall is from the largest private bank – HDFC Bank. It has shown 93% correlation with a very highly volatility against the bank nifty index. Recently the bank had some huge technical challenges due to which its major operations of credit card were stopped by RBI and it was followed by outage in core banking & payments system last year leading to a large backlash from corporate and retail customers. But now looks like bank is ready to bounce bank as the retail banking king of India with RBI lifting all operational bans on HDFC Bank.
Technical Setup
HDFC Bank has seen a huge sell of over 8.5% in last 19 trading sessions and on daily charts the bank was able to show 1st sign of revival with gap up opening on 10th March and consolidating around the same levels on 11th March. The bollinger bands have squeezed on 15 minute charts indicating consolidation and ready for breakout. Looking at a longer time frame the 1 – Day time interval chart shows signs of recovery with the extremely wide bollinger band trying to squeeze on the upside.
Charts by : https://in.tradingview.com/
Our View & Recommendation
We have a bullish view on HDFC Bank , but this is positional trading call with wide stop losses. We believe the Index buying across sectors in coming days will benefit HDFC bank as index tracking funds will pick up this stock at the attractive price its available today.
Recommendation : Buy HDFC BANK @ 1397 / Stop Loss 1345 Target 1 – 1440 there after trail , 2nd target 1540 , Time frame for the trade will be 7 to 21 trading days for both targets.
Chart Analysis
Daily Charts – Bollinger Lower bound rebounding
15 min charts – Bollinger Squeeze – Consolidation phase.
