How to trade HDFC Bank stock ahead of bonus issue meet? Key levels to track

HDFC Bank to announce Q1 results and consider a maiden bonus issue on July 19; technical chart suggests bias at the counter likely to remain favourable above ₹1,945 levels.

HDFC Bank stock is likely to be in focus in the run-up to the July 19 (Saturday) meeting; wherein the bank's board will be announcing the Q1 results, and also consider the proposal for a special dividend and its first-ever bonus share issue.  On Wednesday, HDFC Bank stock rose to an intra-day high of ₹2,023 on the NSE, and quoted with a gain of around 0.6 per cent above the ₹2,000-mark in morning trade.  The stock, at present, trades near life-time highs, and has surged as much as 25 per cent from the calendar year low of ₹1,619 hit in the first month of the year.  On the earnings front, the bank's management is confident on growth citing the long-term housing demand in India, and its economic prospects. The management also believes HDFC Bank has successfully navigated the merger and the bank is now positioned for faster growth. READ MORE  On July 19, along with the bonus issue announcement, investors will also closely track the record date for the bonus shares. The record date plays an important role in ascertaining eligible shareholders for any corporate action, including bonus shares.  ALSO READ | ICICI Prudential vs HDFC Life vs ICICI Lombard: Which stock to bet on post Q1 results?  Meanwhile, here's a technical outlook with key levels to track on HDFC Bank stock. 

HDFC Bank

Current Price: ₹2,007  Likely Target: ₹2,090  Upside Potential: 4.1%  Support: ₹1,987; ₹1,945  Resistance: ₹2,030  HDFC Bank stock looks favourably placed on the technical charts across time-frames. The price-to-moving averages action is also clearly positive, with the short-term moving averages quoting firmly above the longer-term averages. Further, the stock is seen trading with a favourable bias on the monthly scale for the sixth straight month.  The only factor to worry, seems the weekly chart, wherein the stock is seen trading in slightly overbought territory; with key momentum oscillators showing some signs of tiredness. The weekly Moving Average Convergence-Divergence (MACD) line is seen converging with the signal line, and the Slow Stochastic seems to be moving sideways in the overbought zone. The Average Directional Index (ADX), however, remains in favour of the bulls. The ADX helps in determining the strength of the existing trend, which in this case is positive for now.  The daily chart shows that the near-term bias for HDFC Bank stock is likely to be positive as long as the stock holds above ₹1,945 levels, with near support seen at ₹1,987. On the upside, the stock can potentially spurt to ₹2,090 levels, with interim resistance likely around ₹2,030 levels.