According to ICICI Direct, The NBFC space has remained under pressure and was unable to perform in line with the market recovery in the past.
ICICI Direct's research report on HDFC
Derivatives & Quantitative Outlook
The NBFC space has remained under pressure and was unable to perform in line with the market recovery in the past. However, in the recent recovery, stocks from the NBFC space witnessed fresh upsides and were major drivers of the index up move. Among heavyweights, HDFC Ltd is likely to move out from its three month consolidation zone. It is likely to test its major breakdown levels of Rs 2150 in the ongoing recovery.
Like most stocks, open interest in HDFC has also declined substantially. From near 35 million shares in February it declined to 28 million shares in March and declined further to 26 million shares in May suggesting no addition of OI despite market recovery. However, in the last month itself, significant fresh addition of open interest was observed in the stock. We believe lower levels were used to accumulate the stock. There is ample room for fresh addition. We expect fresh longs to take the stock further higher.
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