PBOC ups stake in HDFC. How to trade HDFC twins at the bourses today?

Shares of Housing Development Finance Corporation (HDFC) tumbled nearly 3 per cent to Rs 1,655 levels on the BSE on Monday morning before recovering some of the lost ground. The fall was mostly in line with the S&P BSE Sensex that lost over 2 per cent in morning trade. 

Meanwhile, People’s Bank of China (PBoC) has increased its shareholding in HDFC amid a sharp correction in shares of India’s largest mortgage lender. The Chinese central bank held 17.5 million shares (or 1.01 per cent) at the end of the March 2020 quarter, according to a regulatory disclosure by HDFC. READ ABOUT IT HERE

HDFC Bank, which is due to report its financial performance for the March 2020 quarter soon, recently reported better-than-expected loan growth at around 21% YoY for FY20. "The bank will likely be amongst the key beneficiaries (including other large banks) on the CASA/liability front from the Yes Bank episode, aiding its CoF. The bank could use the opportunity of contained slippages in Q4FY20 to arrest the recent decline in PCR (at 67% in 3QFY20)," wrote analysts at Dolat Capital in a result preview note.

Here is how you should trade HDFC twins and the key levels you shoud keep a tab on.

HDFC Bank Ltd (HDFCBANK): The counter has a support at Rs 800 levels as per daily chart. On the higher side, a consecutive close above Rs 950 may trigger further upside towards Rs 1,040 and then Rs 1,080 levels. The overall trend remains stable above Rs 800 levels and any upside or a consolidation with a rise in volumes may boost the sentiment further. The Relative Strength Index (RSI) has come out of an oversold condition, shwoing stability and is a mark of a likely upside in the days ahead. Moving Average Convergence Divergence (MACD) made a positive crossover below the zero line, indicating that the support levels are likely to ward-off selling pressure for the few sessions. CLICK HERE FOR THE CHART


Housing Development Finance Corporation Ltd (HDFC):  The counter needs to absorb the selling pressure emerging above Rs 1,800 levels. The current formation suggests consolidation in the range of Rs 1,450 to Rs 1,850 levels, as per the daily chart. Investors hould be cautious in this stock. The consolidation will determine the next course of action. That’s said, the immediate support comes in the range of Rs 1,600 to Rs 1,570 levels. The volumes scenario depicts normal outlook with volume trading on an average scale, as per daily chart. CLICK HERE FOR THE CHART