Here’s why HDFC Bank is a buy despite the US banking crisis
The Indian equity market has endured another week of negative trades as the Nifty slipped below last week’s low on the back of the banking crisis in the US. The benchmark Nifty made a low of 16,850, where it found support at the 21 exponential moving average. On the daily chart, the index found support at the historical congestion level, which led to recovery on the last day of the week.
A Doji pattern followed by a recovery candle on the daily chart indicates the possibility of a bullish reversal. On the higher end, an immediate resistance is placed at 17,250, where the bears might try to return to the market. However, if bulls manage to take the Nifty above 17,250, the index may move towards 17,500–17,600. On the lower end, support remains intact at 16,950.
The Bank Nifty bulls came back strong on the last day of the week and the index recovered sharply from the morning lows. The index broader trend remains negative but a pullback rally cannot be ignored from the current level as the index is trading in the oversold territory. The index lower-end support stands at 39,000 and the immediate upside resistance is visible at 40,000. Above which the index may move towards 41,000.
Meanwhile, the Financial Services index has moved up after a Doji formation on the daily chart, suggesting a rise in optimism in the space. The momentum indicator is entering a bullish crossover on the daily chart. On the daily chart, the index found support at historical congestion. Over the short term, the index may move up towards 18300/18500. On the lower end, support is placed at 17500.
Here are 2 stock-specific opportunities in the current market:
Buy PERSISTENT at ₹4,645, Target: ₹5,000, Stop Loss: 4,500
The stock has given a consolidation breakout on the daily chart, suggesting a reversal in the price trend. Besides, the price has moved above the 50DMA on the daily chart. The daily momentum indicator RSI is in bullish crossover. On the higher end, the stock has resistance at 5000. On the lower end, support is placed at 4500.
Buy HDFC BANK at ₹1,573, Target: ₹1,650/1,700, Stop Loss: ₹1,530
HDFC BANK on the weekly chart has found support near the rising trendline and has formed a morning star pattern on the daily chart. The stock recovered from the support zone of 1530 and can witness a pullback rally if bank nifty sustains above the 39,000 level. The immediate resistance is visible at 1650 and once surpassed on a closing basis can extend the rally toward the 1700 level.
The author, Rupak De is Senior Technical analyst at LKP Securities
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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