Can We Bank on HDFC for the Long-term?

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Post HDFC Bank quarter result, we have seen dark clouds covering up markets. Massive correction on the Indices have been recorded and headlines are turning very negative with all doubts and queries. Considering all the chaos, being a rational thinker is difficult at times.


With all due respect to the fundamental views of stalwarts, we present our view on the price action without any biased opinion and with complete justification.
Let's delve deep into the technical views of our mentor and professor, Kunal Rambhia, and understand what lies ahead for the counter.
Monthly Chart: Time Cycle & Price Action
From the year 2000, we have seen the stock to be in a bullish trend. There were years of under performance, but the trend remained intact. The maximum "time correction" was noted during the 2000 era, which lasted for almost 3 years.
In between, we saw corrections of 1.5 years more than 4 times. Price correction was seen 2 times and rest all turned into time correction. In recent times, one such big time correction was seen post COVID.
Monthly: Trendline
The counter has decently held onto this trendline for more than 20 years. Every time it has taken a sizable bounce from the same trendline and continued its journey. Important point to note is that counter has NOT FALLEN to trendline support zone but rather sideways behaviour has brought the price action closer to trendline. So expecting an immediate bounce like the past wouldn't be fair. But certainly the counter is near the support trendline and it's favourable to think bullish from hereon.
Weekly: Volume Analysis
Lifetime high volumes are noted in the counter during correction phases. Simple rule of investing is to buy in panic for the long term. The same behaviour is seen on the chart too, where highest volumes are recorded in the correction, be it time correction or price correction. Similar volumes like the past are seen in recent times too.
Daily Chart: Price action
Though analysing a short-term chart on a daily time frame won't make much logic, but the only observation I try to share is that price action is "positively biased" since 2021 & still within the regression channel in spite of massive decline of the past 2 days.
Putting it All Together: After looking at all higher timeframe charts and mainly focusing on price action (to keep analysis simple for investors), I feel it's a good buying opportunity from an absolutely long-term point of view. I certainly don't expect a bounce or recovery from a short term point of view, but one can't miss out this buying opportunity as an investor with all faith in management and their capabilities!
Statutory Disclosure: Kindly note that this update is only for educational purposes. It is safe to assume that our personal position, our fund’s position, our clients’ positions may be open on the counter. Prefer to take the advice of your financial advisor before initiating any position.
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