HDFC Bank stock ready for a breakout after 2 months; can rally another 7%

The Bollinger Bands on the daily scale had contracted to an extremely narrow range of Rs 1,620 - Rs 1,655; thus warranting a breakout in the near-term. Here are the key levels to watch out now.

After two months of consolidation in a narrow band, HDFC Bank seems well poised for a significant breakout on the daily. Recently, the Bollinger Bands contracted to its narrowest range Rs 1,620 - Rs 1,655.

As of 2:30 PM, HDFC Bank stock has broken above the higher end of the Bollinger Bands and was seen trading around RS 1,663 levels. 

Chart shows, that the key momentum oscillators like the RSI (Relative Strength Index), MACD (Moving Average Convergence-Divergence) and Slow Stochastic are all placed favourably across time-frames. Thus, indicating a higher possibility of the stock breaking barriers on the upside.

As per the daily chart, near resistance for HDFC Bank is seen at Rs 1,682 - its super trend line resistance. Break and sustained trade above the same can trigger an up move towards Rs 1,750 levels; above which a jump towards Rs 1,780 seems likely. 

Going ahead, in case of a dip, HDFC Bank stock is expected to find considerable support around Rs 1,635 levels. Only break and trade below Rs 1,620 can dismantle the positive set-up on the chart. CLICK HERE FOR THE CHART

Key levels to track

HDFC Bank

Current Price: Rs 1,662

Upside Potential: 7.1%

Support: Rs 1,655; Rs 1,635

Resistance: Rs 1,682; Rs 1,750

Here's what HDFC Bank options data suggests: 

HDFC Bank Put Call Ratio (PCR) for the September series stands at 0.57; indicating presence of higher open positions (interest) (OI) in Calls as against Puts. Among Calls, highest OI is visible at Rs 1,660 Strike followed by Rs 1,700.

Amidst today's 1 per cent rally, notable unwinding of Calls writing was seen at Rs 1,700; Rs 1,650 and Rs 1,640 Strikes. However, presence of high OI at Rs 1,660 implies likely resistance for the stock around Rs 1,680 - Rs 1,690 range. 

On the other hand, highest OI in Puts stands at Rs 1,600 Strike followed by Rs 1,650 and Rs 1,640 Strikes. Notable Put writing is seen at Rs 1,650 Strike, some additions at Rs 1,660 and Rs 1,680 Strikes. Thus, indicating likelihood of strong support in the Rs 1,655 - Rs 1,640 range for the September series.