hdfc stock: chart check: this Sensex stock records a breakout of the trend line; is it time to buy after a 20% drop from the highs?

(), part of the S&P BSE Sensex, has fallen more than 20% from its November 2021 highs, but a recent trendline breakout recorded on the daily charts could fuel short-term momentum.

The housing finance company recorded a break above trendline downside resistance placed above Rs 2,240. Short-term traders may look to buy the stock lower or at levels for a target of Rs 2,580 over the next 1-3 months, experts suggest.

The stock has been on investors’ radar recently, which has fueled the momentum. It increased by almost 5% in one week and more than 6% in one month.

The recent price surge helped the stock close above the 50 and 200-DMA on the daily charts this week, which is a positive sign for the bulls.

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The Relative Strength Index (RSI) is at 64.0. An RSI below 30 is considered oversold and above 70 is considered overbought. MACD is above its center and the signal line, it is a bullish indicator.

HDFC is trading above 7 out of 9 oscillators which is a bullish sign. It will release its June quarter results on Friday, July 29.

“The stock recently experienced a trendline break above the Rs 2,240 levels and with a bullish candlestick pattern, the trend has improved and further upside is expected with indicators starting to strengthen” , Vaishali Parekh – Vice President – Technical Research, Prabhudas Lilladher, said.

“The RSI has risen with indicated strength and has a lot of upside potential. It has been holding above the significant 50-EMA level of Rs 2,230 to hold the trend and with the chart looking attractive, this may be a good investment,” she said.

“We suggest traders buy and build this stock for an upside target of Rs 2,580 keeping the stop loss at Rs 2,150 over the next 1-3 months,” Parekh recommends.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Karen J. Nelson