Technical Analysis Outlook of HDFC Limited

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Housing Development Finance (NS: HDFC ) Corporation Limited (HDFC Limited) is the Mumbai based Indian financial service provider known for its mortgage financing. It is a major provider of finance for housing projects in India. The company also has a stake in other major financial services providing areas like banking, life and general insurance, asset management, venture capital, realty, etc.

Last week HDFC Ltd. remained in the limelight as it took the major wave in the financial sector, when on 11th April 2020 HDFC Ltd. Informed the Regulator SEBI about The People's Bank of China’s acquisition of shares from the open market increased its stake in HDFC to 1.01 percent from 0.8 percent in the March, 20 quarter. But on 13th April 2020, the Share price of HDFC Ltd dropped registering a low of Rs. 1646.55 after reaching the day’s high at Rs. 1763.75. Peter Noronha of NDTV reported this as “HDFC has declined more than 1 percent today after the People's Bank of China (PBOC) increased its stake in the mortgage lender. The shares in the Mumbai-based company rose as much as 3.5 percent in early trade but soon surrendered all their gains. At 11.40 am, the shares were quoting at Rs 1,677, lower by 25 points or 1.4 percent, on the BSE. The shares touched an intra-day high of Rs 1,763 and a low of Rs 1,648 thus far”.

The trading community is under a skeptical mood to find where the HDFC’s market price of its shares will move further. The following fig.1 highlights the weekly trend of HDFC’s shares price. It shows the share price of HDFC Ltd. is in the bear’s grip. Though the bulls specifically the foreign portfolio investor (FPI) from China for some time tried to take the price up but failed to take it further up. From the following fig. 1 it is observed that the weekly RSI is in strong selling zone at 30.9577 at the same time the MACD line is at -140.1192. This indicates further consolidation in price range. This state of chart pattern indicates the consolidation in the weekly price chart where the consolidation range stretches between Rs. 1476.00 to Rs. 1915.00. The weekly chart of HDFC Ltd. shows minor correction in the first quarter of 2020. Due to COVID 19 pandemic if the price falls below Rs. 1475.00 in such a case there is a greater possibility that the price of HDFC will further move southwards and it will get support at Rs. 1180.00 – Rs. 1200.00.

Fig.1: Weekly Candlestick Chart of HDFC Limited
In the following Fig. 2 the consolidation level of HDFC Ltd is depicted. This level is made between Rs. 1475.93 and Rs. 1867.89. This daily chart pattern indicates the future short-term bullish movement in the HDFC’s share price. The Fibonacci Retracement levels drawn in the daily price chart of HDFC indicates short term upward movement in the price. In this kind of chart pattern, the possible target price could be Rs. 1860 for a short term period.

Fig.2: Daily Candlestick Chart with Fibonacci Retracement of HDFC Limited
In the following Fig. 3 the daily chart shows the consolidation phase. Here, in this case, one can find the sellers are reluctant to sell below Rs.1468.00

Fig.3: Daily Candlestick Chart with demand zone of HDFC Limited
In the following Fig. 4 the daily chart shows the consolidation of price and when the closing prices are joined together it forms the shape that looks like the outer surface of the moon. This sort of chart pattern indicates the reversal on the price movement and the movement is considerably short-term in nature. But in no cases, the chart pattern does not indicate a strong long-term upward movement in the HDFC’s share price. Though the bullish movement in price will come it will not sustain for long. This chart Pattern indicates the HDFC is now with bears’ grip. The Moving Average 10/20/30/50/100 indicates the HDFC is experiencing the bearish phase. But the half-moon circle indicates the possible short-term bullish movement in the HDFC’s share price.

Fig.4: Daily Candlestick Chart with different moving averages of HDFC Limited
The following Fig. 5 is the continuation of the previous chart that asserts that the half-moon circle shows that there is a greater possibility of a bullish trend in the HDFC’s share price.

Fig.5: Daily Candlestick Chart with different moving averages of HDFC Limited
To find the confirmation about the HDFC’s price movement the help of EMA can be taken which also forms the shape of the half-moon circle, which indicates there possible short-run bullish trend is excepted to come in the first quarter in 2020.

Fig.6: Daily Candlestick Chart with Exponential Moving Averages of HDFC Limited
The DMA also confirms the bullish view for HDFC, as the shorter DMA has already crossed the long-term DMA and the angle trend line to indicates there is a strong bullish trend that is going to come in the 1st quarter. The MACD line too indicates the short term revival in the HDFC’s share price.

Fig.6: Daily Candlestick Chart with Double Moving Averages of HDFC Limited
Pivot point
HDFC Limited
Classic
Fibonacci
Camarilla
Woodie's
DeMark's
S3
1557.06
1604.73
1657.06
1552.2
-
S2
1604.73
1637.43
1664.91
1602.3
-
S1
1642.66
1657.63
1672.75
1637.8
1623.7
Pivot Points
1690.33
1690.33
1690.33
1687.9
1680.85
R1
1728.26
1723.03
1688.45
1723.4
1709.3
R2
1775.93
1743.23
1696.29
1773.5

R3
1813.86
1775.93
1704.14
1809


Momentum oscillator too indicates the possible bullish movement in the HDFC’s price.

Taking all these factors in mind one can keep the bullish view in the HDFC’s price in the first quarter of 2020.

Weekly

Daily candlestick

Daily candlestick fib

Daily candlestick moving

Daily candlestick diff

Daily candlestick exponential

Daily candlestick moving

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  • Bhushan Kohli @Bhushan Kohli
    Excellent analysis.
    Like 0
  • mitul patel @mitul patel
    very nice...keep sharing
    Like 0
  • Shekhar Soni @Shekhar Soni
    Excellent sir 🙏🙏👍
    Like 0
    • Anupam Panigrahi @Anupam Panigrahi
      @Shekhar Soni today "In this kind of chart pattern, the possible target price could be Rs. 1860 for a short term period" became reality
      Like 0
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  • Abhay Gupta @Abhay Gupta
    Which shares i should but for short term
    Like 0
    • Anupam Panigrahi @Anupam Panigrahi
      @Abhay Gupta today "In this kind of chart pattern, the possible target price could be Rs. 1860 for a short term period" became reality.
      Like 0
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      100

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