Monday, January 28, 2013


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On 18th January, 2013 HDFC Bank declared Q3FY13 results and news flashed on Reuters is as follows: 
REUTERS - HDFC Bank (HDBK.NS), India's No.3 lender, met forecasts with a 30 percent rise in quarterly profit on Friday led by higher loan growth, better fee income and stable asset quality.
Mumbai-based HDFC Bank, which has posted profit growth of more than 30 percent every year for the last decade, said its net profit rose to 18.6 billion rupees in the quarter ended December from about 14.3 billion rupees a year earlier. Net interest income grew 21.3 percent to 38 billion rupees.
We have mentioned many times that news can produce one spike but the trend remains as it is. Here, we have observed the same thing, prices have made an intraday high of 674 (on 18thJanuary 2013) and on very next day it has continued the down move in the falling channel. Also Ratio analysis helped us to see the broader view and suggested that outperformance of HDFCBank ended against Bank Nifty and underperformance has started. Below chart is picked up from“The Financial Waves STU” published on 21st January 2013.  
HDFCBank/ BankNifty Ratio chart: 
HDFC Bank Dailychart:
HDFC BANK 120 mins chart:
Wave Analysis:
The first is the  ratio chart of HDFCBANK BANKNIFTY. It means HDFC BANK’s performance against BankNifty. Since 2011 to 2012 ratio moved higher from 0.031 to 0.035.  Within this period HDFCBank was the strongest and outperformer within the banking sector. Thereafter, in the last month of 2012 it has breached the upward moving blue channel on downside and moved lower. This suggests the end of outperformance of this stock and start of underperformance. In short, as long as ratio moves below 0.025 levels our bias is negative and prices can move lower till the next support of 0.020/0.018 levels.
As shown above in daily chart of HDFC Bank, prices have made a high of 705 levels in the month of November 2012, consecutive for fourth time it has taken resistance near upper end of the channel (marked by red color symbol) and broke the channel on downside. This is a negative sign.
We can observe above in 120 mins chart, prices have retraced 23.6% of the previous up move from 485 to 705 levels. It has formed lower top and lower bottom in the small red channel. This gives second negative confirmation.
In short, as long as prices move within the downward sloping red channel our bias is negative. Move below 650 will continue the underperformance against Bank Nifty and it could move lower till 50% of retracement level which comes near 600/595 levels.
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1 comment:

  1. Very nice artlcle thanks for veluable knowledge