Technical Analysis

Stock query: HDFC Bank in a short-term sideways trend

Yoganand D | Updated on May 10, 2020 Published on May 10, 2020

To alter the medium-term downtrend, the stock needs to decisively rally above ₹1,100

Here are the answers to readers’ queries on the performance of their stock holdings.

I bought the stock of HDFC Bank at ₹950. Can I hold it for a long term?

Rajagopalan J

HDFC Bank (₹928.9): Following a sharp fall in early March, the stock of HDFC Bank registered a 52-week low at ₹738.9 in late March. Subsequently, the stock reversed direction and began to trend upwards. Since then, it has been in a corrective short-term uptrend.

However, the stock encountered a key resistance at ₹1,000 and started to trend downwards. Over the past one month, it has been broadly trading in the wide band between ₹850 and ₹1000.

A slump below the lower boundary can pull the stock down to ₹800 and then to ₹750 levels over the medium term. The next key support is at ₹700.

On the upside, an emphatic break above the immediate resistance level of ₹1,000 will strengthen the corrective rally and take the stock northward to ₹1,050. To alter the medium-term downtrend that has been in place from the December 2019 high of ₹1,304, the stock needs to decisively rally above the crucial resistance level of ₹1,100.

Such a break above this barrier will strengthen the uptrend and take the stock northwards to ₹1,180 and 1,250 levels. The subsequent resistance is at ₹1,300.

Inventors with a long-term perspective can buy in declines and stay invested with a stop-loss at ₹785 levels. You can also stay invested with this stop-loss.

What is short-term outlook of Petronet LNG horizon?

Ashish Pathrabe

Petronet LNG (₹224.6): Since taking support at ₹171 in late March, the stock of Petronet LNG has been in a short-term uptrend.

While trending up, it breached a key resistance at ₹204 and the 21-day moving average in early April. But, the stock met with a key resistance at ₹245 last week and started to decline

The stock hovers above the key level of ₹220. A slump below this level can pull it down to ₹210 and then to ₹204.

A decisive fall below the crucial support level of ₹204 will mar the short-term uptrend and drag the stock down to ₹180 and then to ₹170 levels.

Investors with a medium-term view can buy in declines with a stop-loss at ₹190.

A conclusive break above ₹245 can accelerate the uptrend to ₹256 and then to ₹275 over the medium term.

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Published on May 10, 2020

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