HDFC Bank can rally 11% to a new high of Rs 1,750, suggest tech charts

Once the hurdle mark is decisively conquered on the higher side, the upside rally may see a new all-time high

The shares of HDFC Bank opened nearly 3 per cent higher after the Reserve Bank of India (RBI) lifted restrictions on issuing credit cards, which it detained last December. However, RBI's ban on the bank introducing new digital initiatives will continue. READ MORE

This development, brokerages believe, addresses key overhang on the stock as the lender is the largest credit card issuer in the country. "HDFC Bank has underperformed and has been range-bound over the last couple of months owing to pressure on NII growth and margins. The lifting of these RBI restrictions thus addresses the key overhang. Further, we also expect growth trends to revive in retail especially in the unsecured lending segment in coming quarters," brokerage Motilal Oswal Financial Services said.

Even tech charts are flashing bullish signals for the stock. 

HDFC Bank Limited (HDFCBANK)

Likely target: Rs 1,750

Upside potential: 11%

HDFC Bank is attempting to break out of the sideways movement it has been witnessing since April 2021. The narrow range of Rs 1,563 to Rs 1,350 may see a positive up move on partial relief by the RBI. Once this hurdle is decisively conquered on the higher side, the stock may rally towards a new high of Rs 1,750 levels.

Closing basis support stays at Rs 1,500 levels, followed by a 50-weekly moving average (WMA) at Rs 1,412. As long as this support is held, the counter may see buying momentum on healthy corrections. Both time frames, daily and weekly charts, are highlighting an optimistic sentiment for the counter above Rs 1,563 level. The upside bias can gather further momentum if the stock manages to close with strong volumes on the breakout mark. 

Lastly, the Relative Strength Index (RSI) is holding the decisive value of 45, which indicates further strength past every major hurdle. CLICK HERE FOR THE CHART