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SBI, HDFC Bank, DLF: RBI policy may trigger an upside in these 5 stocks

The RBI announced a status-quo policy, retaining its accommodative stance amid the threat surrounding Omicron coronavirus variant. Accordingly, the repo and reverse repo rates remain unchanged at 4 per cent and 3.35 per cent, respectively. Most interest rate sensitive stocks rallied in this backdrop, with banks ganing the most. Leading market and economy experts said that the policy outcome was on expected lines. Inflation, however, could sorprise on the upisde in the months ahead. “The RBI policy announcement was on expected lines as the central bank continued to support growth an.....
The RBI announced a status-quo policy, retaining its accommodative stance amid the threat surrounding Omicron coronavirus variant. Accordingly, the repo and reverse repo rates remain unchanged at 4 per cent and 3.35 per cent, respectively. Most interest rate sensitive stocks rallied in this backdrop, with banks ganing the most.

Leading market and economy experts said that the policy outcome was on expected lines. Inflation, however, could sorprise on the upisde in the months ahead.

“The RBI policy announcement was on expected lines as the central bank continued to support growth and sounded caution on the Omicron risk. We expect inflation prints to surprise on the upside and average at 5.6 per cent for FY22, driven by elevated input and fuel costs and as the base effect wanes off. On liquidity normalisation, the RBI continued its auction based rate management policy, moving away from the reverse repo – so far the effective overnight rate – towards the repo rate through liquidity rebalancing from the overnight to the VRRR (variable rate reverse repo) window. We expect this to put further upward pressure on the short-end of the curve,” said Abheek Barua, Chief Economist, HDFC Bank.

Given this, should you invest in interest rate sensitive stocks? Here are few that can rise up to 11 per cent, technical charts suggest.

State Bank of India (SBIN)

Likely target: Rs 540

Upside potential: 10%

The shares of State Bank of India have rebounded strongly after holding the support of the 100-day moving average (DMA), currently positioned at Rs 460 level. The ensuing up move seems headed to conquer the selling pressure at Rs 488, which is its 50-DMA. And when this happens, the breakout may see a sharp rise towards Rs 540 level. This structure may hold true as the Relative Strength Index (RSI) formed a positive crossover heading upward. CLICK HERE FOR THE CHART

 

 

HDFC Bank Ltd (HDFCBANK)

Likely target: Rs 1,620 and Rs 1,700

Upside potential:  5% to 11%

A gap-up opening displaying stability above Rs 1,535 indicates a breakout of “Inverse Head and Shoulder”, according to the daily chat. This bullish chart pattern promises a rally in the direction of Rs 1,620 and Rs 1,700 levels. The closing basis support for the stock comes at Rs 1,520 and Rs 1,500 levels. In addition, a trendline breakout can be observed on the daily charts. CLICK HERE FOR THE CHART

 

Union Bank (UNIONBANK)

Likely target: Rs 51

Upside potential: 9%

Yes, it is very true that the shares of Union Bank have strong resistance at Rs 47 levels and unless this mark is not getting conquered with aggressive volumes, the breakout may not see added interest. However, the stock seems to deeply honour the support of 100-DMA placed at Rs 44.60 levels. Going forward, a decisive move above Rs 47 may see a rally in the direction of Rs 51. The MACD is attempting to conquer the zero line upward, suggestive of the positive momentum, according to the daily chart. CLICK HERE FOR THE CHART

 

Manappuram Finance Limited (MANAPPURAM)

Likely target: Rs 190

Upside potential: 7%

The gap-down in the month of November had dismantled the positive bias, which resulted in a downfall of over 20 per cent in recent times. This weakness received support near the accumulation range of Rs 170 to Rs 155, which was seen in August and September 2021. A decent reversal could see a rebound towards Rs 190. The closing basis support stays at Rs 170 levels, according to the daily chart. CLICK HERE FOR THE CHART

 

DLF Ltd (DLF)

Likely target: 

Upside potential:  4% to 9%

As long as the shares of DLF Ltd defend Rs 373 levels, which is its 100-DMA, the positive bias could revive towards the significant hurdle of Rs 412, its 50-DMA. In addition, a sustained move above this hurdle may further push the stock towards Rs 431. Although, the Moving Average Convergence Divergence (MACD) trades under the zero line, the RSI has formed a positive crossover and if it manages to hold 50 value, the trend may see sharp upside, according to the daily chart. CLICK HERE FOR THE CHART


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