HDFC Bank has been under performing NIFTY in this year 2013 i.e., from past three months. It is showing clear signs of topping out pattern in intermediate term.
HDFC Bank v/s NIFTY ratio Analysis
- HDFC Bank colored in yellow
- NIFTY colored in blue
The ratio analysis indicates clear under performance in the entity when compared Index (NIFTY). The stock results for the last quarter were below street expectations that has shown the fundamental weakness is well.
HDFC Bank Daily chart
The daily chart for the counter showing lower tops and lower bottom with an indication of stock in a intermediate downtrend. The formation of bearish triangular formation is on the verge of a break down in the entity with distribution happening and an evening star candlestick pattern formation in daily charts. Along with it the price trending downwards technical indicators are having negative divergences is well. An increase in volume on the downward direction can lead the stock towards lower targets.
Fig. 1: HDFC Bank Daily Chart Fibonacci Counts
Fig. 2: HDFC Bank Daily Chart Fibonacci Counts
The counter gave a short covering rally from 616 - 660 odd levels. The short term fibonacci counts displaying it has retraced from 50% (Which acted as resistance) of the downtrend channel of Rs. 705.60 - 616 as shown in Fig. 1.
If the entity trends downside the targets which it can retrace can be as much as _ _. _% as shown in Fig.2.
HDFC Bank Weekly Chart
The weekly chart in the entity also suggesting the weakness with the verge of a trendline breakdown and also in the process of a bearish triangular pattern formation. So the confirmation on daily and weekly charts along with ratio analysis with the Index stock looks technically weaker and expected to under perform in near term.
So long term investors can exit the counter and can enter at much lower levels along with confirmation on long side. The downside breakdown in the stock can take it towards 608 and 5 _ _ odd levels.
Short traders can take a positional short in the counter around 650 - 665 odd levels with a stop loss above 690 on closing basis for targets of 608 and 5 _ _.
Equity Research Analyst
To know more about probable counts contact us back on rvangadi@googlemail.com
Disclaimer: This is just an view based on the research of individual. So kindly trade along with the consultation of your financial adviser, market trends, price action and own risk appetite considered while investing or trading in stock markets.
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