Nifty 50 heavyweight HDFC Bank is scheduled to release its quarterly earnings on April 20. Expectations are that the earnings will match the strong operational update for the March quarter.
Leading up to the announcement, HDFC Bank is currently trading around Rs 1,501.00, down 8.25 or 0.55 percent as of April 18. Here's how technical analysts are positioning the HDFC Bank scrip:
According to Akshay Bhagwat, Senior Vice President of Derivative Research at JM Financial, "The recent price correction has seen the HDFC Bank stock retest its prior breakout zone near 1480. This zone now offers support and would be a pivotal level in determining the short-term trend strength. Expect a recovery and momentum regain till 1560/1595."
Key levels to watch out for by Bhagwat:
- Positive outlook remains until above 1470
- 1425-1470 indicates a neutral/sideways zone
- Negative sentiment kicks in below 1420
Regarding derivatives, Bhagwat believes that the lowest OI PCR readings of 0.48 seen since March indicate a heavy presence of Call OI. The major OI position at 1500 pe defines the support area (1480-1500), and CE OI at 1550 defines resistance. Futures OI position in April remains neutral. The uptick in OI at 1520/1530 strikes hints at a potential recovery attempt, suggesting a moderately bullish view with a recovery expected up to 1550.
Arun Kumar Mantri, Founder of Mantri Finmart, believes that HDFC Bank is currently trading around the strong support area of 1470-1500 on the daily charts and is expected to maintain this level in the upcoming sessions. On the derivatives front, the April 1500 strike PE has the highest Open Interest, with more than 4.3 lakh shares.
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"The counter is hovering around the 20 and 50 DMAs, indicating that a significant move may be imminent in the upcoming trades on either side. Short-term traders should take note of the support levels around 1470-1480 on the lower side, while if the stock price reaches 1530, it may experience further short covering. The overall setup of the stock looks positive as long as it holds above 1470 on the daily chart," said Mantri.
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Mantri suggests a strategy of buying on dips, going long in futures, and buying PE. The overall setup appears strong.
Derivative strategy recommended by Mantri
Buy HDFCBANK APRIL Futures at Rs 1505 and Buy HDFCBANK APRIL 1470 PE Rs 1480 10.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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