Will HDFC BANK LTD-ADR breakout?

HDFC BANK LTD-ADR (NYSE:HDB) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:HDB.

Zooming in on the technicals.

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

Taking everything into account, HDB scores 9 out of 10 in our technical rating. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, HDB is showing a nice and steady performance.

• Both the short term and long term trends are positive. This is a very positive sign.
• Looking at the yearly performance, HDB did better than 92% of all other stocks. On top of that, HDB also shows a nice and consistent pattern of rising prices.
• HDB is one of the better performing stocks in the Banks industry, it outperforms 98% of 378 stocks in the same industry.
• HDB is currently trading in the upper part of its 52 week range. The S&P500 Index is also trading in the upper part of its 52 week range, so HDB is performing more or less in line with the market.
• HDB is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.

How do we evaluate the setup for NYSE:HDB?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NYSE:HDB scores a 8 out of 10:

Besides having an excellent technical rating, HDB also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 68.82, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading setups like NYSE:HDB

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.