Big movers on D-Street: What should investors do with HDFC Bank, BEML and Honasa Consumer?

Equity indices plunged nearly 1.5% on Thursday, weighed down by intense selling in market heavyweights amid a mixed trend in global equities.

Stocks that were in focus include names like HDFC Bank, which fell 1.06% and BEML, which gained 1.8% and NTPC, whose shares jumped 10% on Thursday.

Here's what Kushal Gandhi, Technical Analyst at StoxBox, recommends investors should do with these stocks when the market resumes trading today.

HDFC Bank

After a remarkable surge of over 130% from its Covid lows, HDFCBANK's share price has been moving sideways since October 2021, forming a volatility contraction pattern. This development on the weekly timeframe is indicative of potential accumulation, as the contractions display decreasing price depth and time correction over the course of the stock's lateral trend.

The noticeable accumulation by astute investors has also significantly limited drawdowns in this large-cap banking stock, reflecting its strength compared to the broader market.

Furthermore, the positive price structure, highlighted by higher lows, suggests an improvement in the upward trend, alongside enhanced earnings per share (EPS) strength, price strength, and buyer demand. The Relative Strength Index (RSI) across daily and higher timeframes is demonstrating a positive slope above its median levels without any divergence from price, signalling a buildup of price momentum - an encouraging sign.

In light of these factors, we maintain a bullish outlook on HDFC Bank and recommend entering a buy position within the range of 1790-1770. For a medium-term opportunity, we target a price of 1949, and we advise a stop loss at 1703.

BEML

The price action analysis on the daily timeframe suggests potential accumulation, as the stock has been trending sideways following a profit booking rally of nearly 35%, which is a positive development. Currently, the price action is forming a triple bottom pattern, indicating a potential trend reversal. The stock shows improving earnings per share (EPS) and price strength, and high buyer demand.

However, it is important to note that the price action appears slightly extended based on the past five days' movement. Additionally, there is significant overhead resistance due to a gap down in the range of 4425 to 4310. Therefore, we recommend purchasing BEML shares once the resistance zone is decisively reclaimed on a closing basis.

Honasa Consumer

The pattern analysis of HONASA has recently revealed a breakdown from a double top formation, suggesting a potential trend reversal. This breakdown occurred with a significant gap down, followed by strong downward movement accompanied by relatively higher trading volume.

The stock has declined nearly 54% in the last 11 trading sessions and is currently in oversold territory. Unfortunately, it has not shown any clear signs of recovery, indicating ongoing selling pressure. Therefore, we recommend avoiding attempts to "catch a falling knife.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)