Will HDFC Bank correct further?

HDFC Bank, which is considered to be a bellwether of large-cap indices has moved into a correction phase after making an all-time high of 1,464.40 and is currently trading at 1,374.15. Presently, its support is between 1,358 and 1,368 levels while the resistance stands at 1,374 to 1,384 levels. If we look at the options data, then from the current levels, it has strong support at 1,300 levels and the resistance is at 1,400 levels. Having said, on a 15-minute timeframe, HDFC Bank has formed a head & shoulders pattern.

As you can see from the above chart, it has created a head & shoulders pattern in the uptrend, which is a bearish price chart pattern. Not just that, it has also witnessed a pull-back at the 1,400 mark, before continuing its southward journey. This pull-back can be considered as a confirmation and hence, according to this price pattern, it may test 1,310 levels. Although 1,400 being a strong resistance, anything above this level can be considered bullish.

However, mutual fund investors should not worry much about such corrections as these are quite short-term in nature. Therefore, it is not recommended to exit mutual funds, having high exposure to HDFC Bank.

Disclaimer:

This article is just for understanding purpose and should not be considered as a recommendation. Readers are advised to do their own research before making any investment decision. Further, DSIJ and their authors are not responsible for any kind of losses caused.