HDFC Bank hits new all-time high; is there room for further gains?

HDFC Bank-the bluechip stock after trading mostly in the green over the past one week has galloped to a new al-time high in trading on November 28. The sharp gains of nearly 5.5 per cent in past 5 sessions has taken the company's m-cap to Rs 14.01 lakh crore mark.

At the last count at the time of writing this copy, shares of HDFC Bank traded higher by 1.25 per cent ot 22.7 points at Rs 1,833.7, while its peak made today was of Rs 1,836.05 per share on the BSE.

On the NSE, the stock made a new life time high of Rs 1,836.1 per share.

Post the company's Q2 earnings, Motilal Oswal Financial Services gave the most bullish target for the stock at Rs 2,050- signifying still potential upside of over 9 per cent. 

The brokerage estimated the bank to report gradual recovery in loan growth over FY25- 27E with earnings growth accelerating faster. Thus estimating the private sector lender o deliver FY26E RoA/RoE of 1.8 per cent/ 14.6 per cent. The brokerage reiterated its BUY rating with a TP of Rs 2,050 (2.4x Sep’26E ABV + INR295 for subs).

Reasons for sharp upswing

Atul Parakh, CEO of Bigul said, "HDFC Bank experienced notable gains as a result of the recent quarterly rebalancing of the Morgan Stanley Capital International (MSCI) indices. This important rebalancing event is projected to draw in substantial foreign institutional investment, with estimates suggesting that around $1.88 billion will flow specifically into HDFC Bank."

Such an influx of capital not only highlights the bank's strong market position but also reflects growing confidence among international investors in its financial stability and growth potential, he added.

MSCI weightage increase 

In the recent November rejig of the global MSCI index, the weightage for HDFC Bank has been increased to 7.08 per cent and the expected inflows on account of it are pegged at Rs 15,750 crore.

Technical outlook

Commenting on the stock's technicals, Jigar S. Patel- Sr. Manager- Equity Research at Anand Rathi said, "Historically, HDFCBANK has faced a strong resistance zone around the 1800–1790 levels, with the stock reversing from this region on 3–4 notable occasions. This repeated rejection establishes the zone as a critical barrier for upward momentum. 

However, on the positive side, the daily RSI (Relative Strength Index) has consistently sustained above 50 for the last 5–6 trading sessions, signalling a buildup of strength and underlying bullish momentum in the stock. Additionally, the stock has successfully traded above the R3 level of the Camarilla Pivot (1778), which now acts as a support.

As we move forward, the next significant resistance lies at R4 (1821.30). A decisive close above this level would indicate a breakout from the historical resistance zone, potentially triggering a robust upward move. This breakout could set the stage for a rally towards the 1900–1950 range, supported by the momentum seen in RSI and the positioning above key pivot levels. For traders and investors, monitoring the stock's ability to close above 1821.30 will be crucial in confirming the breakout and the subsequent rally potential, he added.