Published on: January 24, 2024
HDFC Bank, a stalwart in the Indian banking sector, has recently witnessed a dip in its share price, reaching 52-week lows following the announcement of its quarterly results. This downward trend has led to a correction of over 15%, impacting the Bank Nifty.
Investors are now faced with the crucial question: Should you buy HDFC Bank shares in the wake of this decline?
HDFCBANK Daily Chart
A glance at the charts reveals a significant break below multiple support zones, which, per technical analysis, will likely transform into formidable resistance levels. The established range for HDFC Bank share price oscillates between 1,460 and 1,530. The breach of these support zones suggests a potential shift in market sentiment, indicating that HDFC Bank may face headwinds in the coming months.
Analysing the chart patterns, it becomes apparent that HDFC Bank might underperform compared to the broader market trends in 2024. The breach of crucial support levels could signify a weakening position for the stock, potentially leading to prolonged underperformance.
For those who follow discussions on the Definedge Forum, an attractive alternative strategy was proposed in November 2023 – swapping from HDFC Bank to TCS. Read here
Buying HDFC Bank shares at this juncture requires careful consideration of various factors. The technical analysis indicates a challenging road ahead for the stock, with potential resistance at previously strong support levels.
