How to trade HDFC Bank stock after its fall today?

Following the Q1 update, the HDFC Bank stock fell 4.19 per cent to hit a low of Rs 1,654.25 on BSE

HDFC Bank shares are in focus on July 5 after falling to Rs 1,653.35, down 73.80 points or 4.27 percent. This decline comes just two days after the bank hit a fresh record high of Rs 1,791 apiece amid a potential MSCI boost. The weaker-than-expected April-June quarter (Q1FY25) business update has raised concerns among analysts.

Brokerages Wary of High CD Ratio

Despite Q1 typically being a softer quarter, brokerages have become wary of the bank's high credit-to-deposit (CD) ratio, which could pressure future margins. In the F&O segment, the stock is seeing a short buildup. Here’s how analysts advise trading the stock in the near term:

Technical Analysis 

Tejas Shah, Vice President of Technical Research at JM Financial, believes that HDFC Bank has corrected quite sharply (down by 8 percent) after making a new all-time high of Rs 1,794. However, after such a sharp decline, the stock is likely to find support either around Rs 1,624 (50 percent Fibonacci retracement of the recent rally) or around its 50-day exponential moving average at Rs 1,591.

Going forward, Shah believes there is a strong possibility of a bounce back from the mentioned support levels. "As long as the stock is holding above its 50-day moving average, the bias remains positive. On the higher side, immediate resistance is at Rs 1,700, and the next crucial resistances are at Rs 1,740 and Rs 1,790-1,800 levels," he added.

Ruchit Jain of 5Paisa.com notes that the stock has seen selling pressure in the last three days as the momentum readings had reached the overbought zone post the recent run-up. "The 40 DENA support is placed around Rs 1,600, and traders can look for a buying opportunity if the stock approaches this support in the short term," advised Jain.

Arun Kumar Mantri, founder of Mantri Finmart, stated, "HDFC Bank is looking sideways on the charts and is trading around the multi-month resistance of Rs 1,720 to Rs 1,750. The support for the stock is around Rs 1,550 to Rs 1,580 on the lower side."

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He added, "The overall structure of the stock seems to be bullish, and buying on dips will be the ideal strategy in this counter. Coming to the levels, Rs 1,600 will be a good bargain price where short-term traders can enter the stock. The immediate targets for the stock are around Rs 1,720 on the higher side."

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