HDFC Bank may fall 5-6% if moves below Rs 598: Harchekar

Amit Harchekar, Senior Technical Analyst -CMT, IIFL expects HDFC Bank to fall 5-6% if it moves below Rs 598. The bank is flirting near resistance zone of Rs 607-608.

Harchekar told CNBC-TV18, "Looking at the charts of ITC or HDFC Bank they are making similar pattern what Tata Motors was making when it tested Rs 300 zone. Infosys when it tested Rs 3500 levels. If we need a market to give a breakout we need to have more up moves seen in leaders like ITC and HDFC Bank. Right now, ITC has already started its correction zone after completing the up thrust at Rs 270 zone while HDFC Bank again it is flirting near its resistance zone of Rs 607-Rs 608." He further added, "Once HDFC Bank moving below Rs 598, one can expect easily a fall of 5%-6%. Apart from that if you look into other banks like State Bank of India (SBI), the charts are indicating weakness. Axis Bank is struggling to move but beyond Rs 1120- Rs 1125 that turns out to be a resistance." "If We need the market to go up we need support of bank Nifty but if you look into Bank Nifty it has been failing to sustain beyond 10,600 mark. So, Bank Nifty has certainly underperformed the market and the rally has been lead from the oil and gas pack like Reliance Industries and ONGC. I believe if market has to go up the leadership would come from metals like Jindal Steel and to some extent Reliance and ONGC where there is a good upside potential of 5-6%. So, the moment the Nifty goes below 5420 I won’t be thinking that the banks will be taking a lead role. In fact I believe the rally would be lead from oil and gas as well as metal stocks." Disclosures: We have recommended these stocks to our clients but no personal holdings.