HDFC Bank remains as Sumeet Bagadia’s Navratri pick
The volatility in the stock market continues despite the approaching festival season. The Sensex, after seeing highs on 15th September, is down about 2%. On Thursday also the benchmark Nifty 50 and the Sensex closed in the negative territory. Though the losses were led by IT majors however the other heavyweights have done little to drive the markets. Amidst Volatility that in the markets is being also led by global factors, analysts are recommending to be selective while picking stocks.
Sumeet Bagadia pick for the Navratri festival includes HDFC Bank Ltd Bagaria has recommended a Buy on the HDFC Bank stock at ₹1547 and up to ₹1510 for a target price of ₹1700 to 1780.
On the daily chart the stock has bounced from support of 1490 levels and currently trading at 1547 forming a three rising soldiers pattern, as per Bagadia
More over the stock has also crossed the initial resistance of 1545 which is also close to its 20 day EMA levels . On a weekly chart the stock has formed a strong green candle after successful closing of Doji Candle a week prior which is a sign of reversal.
Also Read – Top Buy Calls: HDFC Securities sees up to 45% upside in these 5 stocks
In addition, a momentum indicator RSI has bounced from the lower levels 30 and currently trading near 46 levels indicating strength. So based on the above technical structure we are recommending a buy position in the stock for the medium to long term, said Bagadia
HDFC Bank share price has corrected more than 10% from the peaks seen in early July. The heightened concerns around net interest margins, net worth and asset quality of HDFC Bank post its merger with the parent Housing Development Finance Corporation. Has led to this correction. However, in general analysts maintain a positive view on Banking pack as a whole.
Also Read- Market close: Nifty 50, Sensex end lower; mid, smallcaps outperform
Santanu Chakrabarti, Analyst – Banking and Finance at BNP Paribas India in his Q2 previes report said that given current fundamentals on earnings momentum, balance sheet health and a de-leveraged corporate India that promises a not-too-distant credit cycle, bank next twelve months price to book multiples, at or below longterm (10 year) averages, appear incongruous. Fears of the impact of hardening US rates forcing the RBI’s hands in matters of monetary and liquidity management seem to be the only worry to which we can attribute this anomaly. We note that any such impact is going to be damped by India’s internal inflation dynamics being under control and maintains positive view on large banks being led by HDFC Bank.
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.
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Updated: 12 Oct 2023, 06:47 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.