HDFCBANK : Expecting a bullish move of atleast 10%
Updated
Technical Analysis
The price is currently at the low end of a channel and has exhibited an internal descending channel formation. This is a sign of a potential reversal to the upside, indicating a minimum 10% move towards the top of the higher timeframe (HTF) channel.
Fundamental Analysis
Based on the shareholding pattern, it's evident that Foreign Institutional Investors (FIIs) increased their stake from 32.4% to 33.38% in June and then to 53.93% in July 2023. Mutual funds hold 19.13%, while other Domestic Institutional Investors (DIIs) hold 10.88%, and they also increased their stake in July. Only 16.06% is held by retail investors, and the promoter has no stake in the company.
It's clear that institutional investors have a vested interest in the stock. Moreover, the current price is equal to or lower than the price at which FIIs increased their stake in July. This works in our favor as they may not engage in aggressive selling or take actions detrimental to the stock.
The promoter held approximately 25% in June but completely sold their stake to these institutional investors. While the reason for their actions is unclear, it's unlikely that institutions would invest without analysing the company's future growth prospects.
Conclusion
If the price experiences a significant further decline, reaching a more attractive valuation, I might consider adding to my position after conducting a more comprehensive analysis of the company's fundamentals, going beyond just the shareholding pattern. I'll keep you informed when I make that decision.
The price is currently at the low end of a channel and has exhibited an internal descending channel formation. This is a sign of a potential reversal to the upside, indicating a minimum 10% move towards the top of the higher timeframe (HTF) channel.
Fundamental Analysis
Based on the shareholding pattern, it's evident that Foreign Institutional Investors (FIIs) increased their stake from 32.4% to 33.38% in June and then to 53.93% in July 2023. Mutual funds hold 19.13%, while other Domestic Institutional Investors (DIIs) hold 10.88%, and they also increased their stake in July. Only 16.06% is held by retail investors, and the promoter has no stake in the company.
It's clear that institutional investors have a vested interest in the stock. Moreover, the current price is equal to or lower than the price at which FIIs increased their stake in July. This works in our favor as they may not engage in aggressive selling or take actions detrimental to the stock.
The promoter held approximately 25% in June but completely sold their stake to these institutional investors. While the reason for their actions is unclear, it's unlikely that institutions would invest without analysing the company's future growth prospects.
Conclusion
If the price experiences a significant further decline, reaching a more attractive valuation, I might consider adding to my position after conducting a more comprehensive analysis of the company's fundamentals, going beyond just the shareholding pattern. I'll keep you informed when I make that decision.
Trade active
Added on to the position at 1495 summing up the total holding to 2.5% of the capital as of now. May consider further addition only after getting an in-depth clarity on the overall macro economics of the market.
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