Trade –

Entry: 1620-1650
Stop: Below 1565
TGT 1 : 1780
TGT 2 : 1920

Risk reward: 38,500 : 1,56,750

Rationale –

HDFC bank had a cup/consolidation breakout last week as the rally in banks lifted nifty to new all time high. The breakout looks clear with chart becoming self explanatory though couple of things could be hindrance to the same –

– The bank came out with Q2 numbers on Saturday 16th Oct, the result reaction may or may not allow the continuity of the breakout.
– The bank nifty is showing signs of breakout in larger timeframe which will also be affected if results are taken negatively and would lead to a big fall in banks.

Overall the bank nifty has been making similar pattern like nifty did earlier and ultimately broke out giving a good deal of assurance that the presumed breakout in the index stays. With more bank results in line, the move on either side can be volatile making confusing short term patterns.

Bottom line: HDFC bank looks ripe for an upmove given the ongoing trend in global equities and the breakout that happened last week.

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