For some time now, amidst the unstable market environment, there has been continuous heavy selling in the shares of HDFC Bank. This recession is not showing signs of stopping. The situation is such that within just one month the shares of this giant bank have fallen by about 15 percent. Common investors, who considered the shares of this bank as a safe and sound investment, are now confused by this continuous decline. In such a situation, it becomes very important to understand where this decline will stop.
How far did the prices fall?
Talking about the trading session of March 23, the stock started at the level of Rs 763 in the morning. But the pressure was so dominant in the initial trading itself that the price slipped to Rs 751 within a short time. Such a sharp fall in the shares of such a big banking institution of the country is having a direct impact on the portfolios of investors. People who have been stuck in this stock for a long time are now forced to wonder whether more weakness is yet to come in this stock.
Big decision of foreign brokerage
Amidst all this turmoil, there have been some major movements in the market, which have had a direct impact on bank shares. Actually, the Chairman of HDFC Bank has recently resigned from his post. Global brokerage firm HSBC has analyzed this entire incident in detail. The firm clearly believes that this resignation of the Chairman is not due to any corporate governance irregularity, but is merely the result of mutual differences.
However, in view of this instability, HSBC has definitely cut the target price of the bank’s shares. The target which was earlier set by the brokerage house at Rs 1070 per share, has now been reduced to Rs 990. But here it is also a matter of relief for the investors that despite reducing the target, the firm has maintained its ‘BUY’ rating on this stock.
What are the important levels of support and resistance?
Now the biggest question arises that investors who have invested their hard-earned money or who want to make new investments in this fall, should keep an eye on which levels. To clarify this situation, Jigar S Patel, Senior Manager, Anand Rathi Investment Services, has shared some important technical points.
According to his analysis, currently the level of Rs 740 is acting as a very important support for the stock. If selling pressure increases in the market and this important level is broken, then the stock may slip further down to Rs 730. On the other hand, if the stock tries to make a comeback from lower levels, then the level of Rs 765 remains a strong resistance on the upside. The day this stock strongly crosses this hurdle of Rs 765, then in the coming days it can show a target of up to Rs 780.