Dear Readers,
Post HDFC Bank quarter result, we have seen dark clouds covering up markets. Massive correction on the Indices have been recorded. Headlines are turning very negative with all doubts and queries. Considering all the chaos, being a rational thinker is difficult at times.
I am certainly not disrespecting the fundamental views of stalwarts, but certainly sharing what I see on the price action without biased opinion and with full justifications and logic.
So let's understand technically what lies ahead for the counter. Sharing my technical views on the giant with all due respect to efforts of the management over the decades.
Monthly Chart: Time Cycle & Price action:
From the year 2000, we have seen the stock to be in bullish trend. There were years of underperformance, but the trend remained intact. The maximum "time correction" was noted during 2000 era, which lasted for almost 3 years. In between, we saw correction of 1.5 years for more than 4 times. Price correction was seen 2 times and rest all turned time correction.
One such biggest time correction is seen post covid, in the recent times.
Monthly: Trendline
Counter has decently held onto this trendline since more than 20 years. Every time it has taken a sizeable bounce from the same trendline and continued its journey. Important point to note is that counter has NOT FALLEN to trendline support zone but rather sideways behaviour has brought the price action closer to trendline. So expecting an immediate bounce like the past wouldn't be fair. But certainly counter is near to support trendline and it's a favourable to think bullish from hereon.
Weekly: Volume Analysis
Lifetime high volumes are noted in the counter during correction phases. Simple rule of investing is to buy in panic for long term. The same behaviour is seen on the chart too, where highest volumes are recorded in the correction, be it time correction or price correction. Similar volumes like past are seen in the recent times too.
Daily chart: Price action
Though analysing short term chart on daily timeframe won't make much of logic, but the only observation I try to share is that price action is "positively biased" since 2021 & still within regression channel inspite of massive decline of the past 2 days.
Putting it all together:
After looking at all higher timeframe charts and mainly focusing on price action (to keep analysis simple for investors), I feel it's a good buying opportunity from absolutely long term point of view. I certainly don't expect bounce or recovery from short term point of view, but one can't miss out buying opportunity as an investor with all faith in management and their capabilities :)
Disclosure:
Kindly note that this update is only for educational purpose. It is safe to assume that my personal position, my fund's position, and my client's, as well as relative's position, may be open in the counter. Prefer to take the advice of your financial advisor before initiating any position.
