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Abhishek Preetam has an MBA in Finance and started his career as a big-data specialist working at Janalakshmi Social Services. Abhishek is a firm believer in technical analysis and a systematic approach to investing. He develops algorithms and automated portfolio management systems that crunch... More
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  • Analysis: HDFCBANK (HDB) 0 comments
    Jan 21, 2013 12:56 AM | about stocks: HDB

    Today's pick is HDFCBANK (NYSE:HDB). The stock has been on an up-move for most part of the year and it experienced the 52 weeks high of Rs. 700 in November. Since then the stock has been in a downward sloping flag formation. In the last three months, the stock has moved +4% vs. +7% of the Nifty's.

    (click to enlarge)

    Oscillators RSI and CMO are nearing the over-sold territory and are suggesting a short-term bullish price action. The stock is close to the lower Bollinger band, which is suggesting a bullish move for the stock as well.

    The MACD line and signal line are moving very close to each other unable to suggest any short-term direction. Long-term and short-term GMMA lines are very close to each other and are not able to point at the direction of stock movement.

    (click to enlarge)

    HDFCBANK's average correlation with the Nifty is 0.71 is positive and quite strong. The scrip will be closely replicating the movement of Nifty.

    (click to enlarge)

    HDFCBANK has a historical volatility in the range of 1.0 to 4.0. The scrip's volatility however is currently in the lower end of the range and hence should not be a concern to the traders.

    Analysts have positive expectations regarding this stock. Less than expected earnings might hit the street expectations in the coming reviews and might impact the stock as well.

    Given these technicals, we suggest a short-term Hold. A break-out of the flag in either direction will trigger a longer-term call.

    The article first appeared on Your Money@StockViz.biz.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: Bank, India, technical analysis Stocks: HDB
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