HDFC Share Prices shot up by nearly 20% following the announcement of the HDFC Merger with its Banking counterpart.
Of course, the market’s response to the news is not surprising given that the merged entity will become one of the largest enterprises in the industry and the stock exchange.
If the Merger is a complete success, it will overtake TCS in terms of Market cap and stands next to valuation, relative to Reliance Industries.
But what’s surprising is that HDFC Stock Prices were already giving signs of strong buying pressure even before the news went public. Is it an Indication of Some Big Players trading behind the scenes?
Take a look at the Price Action on the 1D Chart.
HDFC – Price Action Analysis on 1D Chart
Overall, HDFC Stock prices were in a Downward Channel. The Parllel Resistance zone was around 2400 and the Parallel Support zone was around 2150.
Prior to the announcement, we had noticed solid buying pressure in the Stock. Right after the announcement, the momentum picked up and prices broke out of the channel.
But even before the announcement, we can see some indication of Accumulation phase such as up thrust and Trapped Sellers. In case, if you’re wondering what an Accumulation phase is, checkout my video on Richard Wyckoff. The link to the video is below.
Even Volumes were consistently increasing before the news; they only peaked due to public participation after the news announcement.
Based on all these factors, we can speculate that Big Players were behind the scenes in HDFC Stock Prices.
So what’s next for the stock? As of now, we can see solid Bullish sentiment in the Stock, but beware of a retracement or retest in the stock prices especially after that large rejection.
Traders should keep an eye on the Price Action, take positions tactically and avoid jumping into the trades without proper setups. If you would like to learn about solid Price action trading setups, checkout my site, it’s free!
Put the Stock on your watch list and monitor the Daily timeframe.
