HDFC Bank share price gains 10% in 3 weeks to hit 1-year high: Should you buy, sell or Hold the stock? | Stock Market News

Stock Market Today: HDFC Banks share price hit 1 Year high on Thursday, having risen more than 10% in 3 weeks.  HDFC Bankshare price has been supporting the  gains in the benchmark indices having significant weightage in the index . Should you Buy Sell or Hold the stock?

Factors contributing to the rise of HDFC Bank

As per the analysts a number of important variables contributed to HDFC Bank’s recent ascent to a 1year or 52-week high and its favorable impact on the overall market. While a decline in Foreign portfolio investors selling is likely to have had positive outcome , the HDFC Bank’s weightage in the MSCI index too has increased in two tranches in 2024, with the second and final tranche taking place in November.

On the fundamental side analysts say that post merger of HDFC and HDFC Bank the benefits are now expected to flow and earnings are already expected to have bottomed out. The ongoing growth in net interest income and other revenue streams, the bank has continuously produced strong financial results.

HDFC Bank has largely outperformed its large private peers in the recent past, primarily on account of its relatively better margin, asset quality outcomes amid rising asset quality noises in unsecured loans, said analysts at Emkay Global Financial Services .

HDFC Bank is also planning to launch IPO of its NBFC subsidiary –HDB Financial Services to the tune of Rs12,500 crore (including OFS of Rs10000 Crore) in line with regulatory requirement and also to unlock value

With low levels of non-performing assets (NPAs), HDFC Bank has a solid asset quality profile, demonstrating responsible lending practices.

Investor confidence has grown as a result of HDFC Bank’s solid fundamentals and promising future, which has raised demand for its stock. The general upbeat attitude in the banking industry, which has been fueled by elements like digitalization and consolidation, has also helped HDFC Bank’s stock price rise said Pravesh Gour of Swastika Investmart Ltd

Technical Outlook

Sudeep Shah, Deputy Vice President, Head of Technical & Derivatives Research (Equity) at SBI Securities said that the stock is strongly outperforming the frontline indices. The ratio chart of the stock as compared to Bank Nifty is at 10 months high, which shows sustained outperformance. Technically, all the moving averages and momentum-based setups are showing strong bullish momentum in the stock.

Shah believes the stock is likely to continue its northward journey and test the level of 1910, followed by 1950 level in the short-term. While, on the downside, the zone of 1830-1820 is likely to provide the cushion in case of any immediate decline.

Technically,HDFC Bank has witnessed a breakout of a multi-year resistance of 1800, and closing above that level has changed the investors sentiment. It has formed a higher highs and higher lows formation on the longer timeframe, as well as it has broken a triangle formation with strong FIIs buying on the chart, said Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd

The MACD (Moving Average Convergence Divergence) reinforces the current bullish momentum, while the RSI (Relative Strength Index) remains favorably positioned, further supporting the positive outlook, added Gour

On the higher side, Rs. 1900 is acting as an important psychological level; above this, we can expect the level of Rs. 2000+ in the near-short term, while on the lower side, Rs. 1760 will act as a major support during any correction.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.