HDFC Bank, HDFC: How to trade these twin stocks and maximise profit?

Is the weakness seen on Monday likely to intensify in the days ahead or is this just a knee-jerk reaction to the June 2021 quarter results announced last week? Here is what the technical charts say

HDFC Bank slipped 3 per cent to Rs 1,475 on the BSE in intra-day trade on Monday, after the lender reported lower-than-expected performance for the quarter ended June (Q1FY22) on Saturday. 

The asset quality of the bank deteriorated slightly at the end of the June quarter. Gross non-performing assets (NPAs) of the bank stood at 1.47 per cent as opposed to gross NPAs of 1.32 per cent at the end of the March quarter and 1.36 per cent as of June 30, 2020. READ ABOUT IT HERE

"We maintain our estimates and see 18% CAGR in profit over FY21-24. Clarity on tech issues/ RBI's restrictions on credit cards should be a key rerating trigger, but so far management has not heard back from RBI. We maintain our Buy rating with a target price of Rs 1,900 with value of bank at 3.6x Jun-23E adjusted PB," wrote analysts at Jefferies in a post- result note.

On the other hand, HDFC slipped 2 per cent to Rs 2,488 levels in intra-day on Monday.

Is the weakness seen on Monday likely to intensify in the days ahead or is this just a knee-jerk reaction to the June 2021 quarter results announced last week? Here is what the technical charts suggest.

HDFC Bank Limited (HDFCBANK)
Outlook: Consolidation range of Rs 1,550 to Rs 1,450

In April 2021, HDFC Bank saw a breakout from the “Double Bottom” pattern, which saw the stock rise, chart suggests. However, the price action seen since then has not met with follow-up buying. The volumes continue to remain weak volumes and the counter faces selling pressure near Rs 1,550 levels. The overall trend will remain positive as long as the 200-day moving average (DMA) support of Rs 1,430 level is held on a closing basis. The current momentum shows a consolidation range of Rs 1,550 to Rs 1,450 levels. This will be the decisive level to watch in the coming sessions.  CLICK HERE FOR THE CHART


Housing Development Finance Corporation Ltd (HDFC)
Likely target: Rs 2,700
Upside potential: 7%

Since the early March 2021, this counter has faced resistance and has been unable to cross Rs 2,700 levels. On the downside, until the support of 200-DMA is held, the stock can attempt rallying towards the above-mentioned resistance. The 200-DMA is placed at Rs 2,436 levels. The Moving Average Convergence Divergence (MACD) is also attempting to cross the zero line; and if that happens, and MACD will show stability. The stock can then regain momentum and move higher. CLICK HERE FOR THE CHART