HDFC bank has traded at the support area of the 680. We have seen on the charts that stock is in a strong uptrend and hence our focus is to look for trades on the buy side. Hence, if the stock rallies towards the support we will be looking to buy into the stock. Banking sector has been under-performing nifty future, but on the charts we came to know that the selling was due to the technical resistance that bank nifty has seen at 13300 zone. But we are bullish on the banking stocks for medium term and this selling or pullback must be the opportunity to buy into the banking stocks, therefore we have chosen HDFC bank for trading.
Positional trade setup for HDFC Bank:
Today the stock was seen consolidating around the same support area of 680. So we will buy HDFC Bank with positional targets of 700 and 720 while stop loss can be below 670 level. Risk to reward ratio is 1:2, making the trade worth taking. High risk traders can even buy HDFCBANK 700 Call options and sell when the stock reaches the target or stop loss as per above said level. Stock can also be bought in the futures contract, lot size of HDFCBANK is 500. Happy trading. Article published on 7.6.2013