Sunday, 30 January 2022

HDFCBANK in budget week -bullish or bearish

How I will trade HDFCBANK in the coming week?

Last week I was personally bullish on HDFCBANK so I took hedged long future trade.

My exiting option trade strategy




PnL  of the long future hedged strategy



Profit booked         33605

Unrealized profit   (43587)

Margin 2 lakh 

Breakeven 1573

Target profit 5% of deployed capital


Plan for this week 










HDFC bank broke a 50-week simple average in the previous week. Any two closures below the previous week's low will confirm the bear trend. 

Supports in daily chart  1410, 1365 and 1300

Future and option data analysis for HDFCBANK

  • ATM IV 27.5
  • The realized volatility  for the last 20 days 20

Open interest

  • 1500 CE  2.6 M
  • 1400 PE  966K
Fundamental analysis of HDFC bank

1. Positive sales growth
2. Increasing free cash flow 
3. Price to sales ratio 6
4. PE ratio 22.5 
5. PEG ratio 1.2
3. Strong process-oriented company

FII data 

FII is net bearish in index future, cash market, and index option 

Astrological sensitive days 

4th to 10th February will be sensitive due to various aspects, Jupiter & moon will cross their dead points in the sign

Plan 

  1. If HDFCBANK breaks two weeks low at 1410 and trades below one-hour post-budget session, will close long future.
  2. Sell another Call during the early budget session to reduce the overall delta of the position and take benefit of volatility expansion
  3. Will keep HDFCBANK delta positive as Banknifty position is overall delta negative.
  4. Post budget I will make the position delta negative and will buy HDFCBANK in cash for the long term. 1353 is 52 weeks low for HDFCBANK.
I expect private banks will perform in increasing interest rate regimes.


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