SBI, DLF: Trading strategies for rate sensitive stocks post RBI policy

An unchanged repo rate may propel rate sensitive stocks to rise up to 15 per cent

The Reserve Bank of India (RBI) on Thursday maintained the repo rate unchanged at 6.5 per cent, following a unanimous decision of the monetary policy committee. The central bank has raised the repo rate by 25 basis points in its last policy. 

The monetary policy committee has increased the repo rate by 250 basis points since May of last year, taking into account the soaring inflation. 

Shares of rate sensitive companies like State Bank of India, HDFC Bank, Manappuram Finance, Dlf and Bajaj Auto began scaling intraday highs post RBI kept the interest rate unchanged.

Here’s the technical outlook for rate sensitive stocks amid repo rate review:-

State Bank of India (SBIN) 

Likely target: Rs 570

Upside potential: 7%

Shares of State Bank of India are in the process of forming an “Inverse Head and Shoulder”, as per the daily chart. Once the counter succeeds in overcoming the Rs 535 hurdle, the upside breakout should aim at reaching to Rs 570-mark.

The present trend denotes an immediate support of Rs 510, which if held decisively, the positive bias shall always see smart reversals, as per the daily chart. CLICK HERE FOR THE CHART

HDFC Bank Ltd (HDFCBANK)

Likely target: Rs 1,800

Upside potential: 9%

The stock has crossed the hurdle of Rs 1,616 – Rs 1620, its 50-day moving average (DMA) and 100-DMA. This move was led the Relative Strength Index (RSI), which move over the 60 value. The stock is reflecting a positive chart structure, with rally expected to hit a new historic peak of Rs 1,800 level.

The support for the upward trend exists at Rs 1,620 and Rs 1,600 level. The recent sessions have seen a robust surge in the volume; this suggests market participants are keenly participating in the unfolding trend.  CLICK HERE FOR THE CHART

Manappuram Finance Limited (MANAPPURAM)

Upside potential: Rs 140

Likely target: 12%

Recently, the stock has claimed a new territory by hitting fresh 52-week high. The momentum is resilient and the trend is anticipated to scale further highs. A closing basis support at Rs 121 could serve as a trend reversal mark for the upward bias. 

The optimistic bias is heading in the direction of Rs 140, shows the daily chart formations. The “Higher High, Higher Low” is well positioned in the current volatility. CLICK HERE FOR THE CHART

DLF Ltd (DLF) 

Likely target: Rs 420 and Rs 440 (breakout over Rs 380)

Upside potential: 10% to 15%

While the present trend is sideways in the broad range of Rs 380 to Rs 335 levels, the positive crossover of the Moving Average Convergence Divergence (MACD), with the indicator making efforts to rise over the zero line, implies a positive underlying momentum.

A breakout over Rs 380 shall see this counter in the path of Rs 420 and Rs 440 levels. The immediate support comes to Rs 240 and Rs 350 levels, as per the daily chart. CLICK HERE FOR THE CHART

Bajaj Auto Ltd (BAJAJ-AUTO)

Likely target: Rs 4,300 

Upside potential: 6%

Shares of Bajaj Auto have overcome the hurdle range of Rs 4,000 to Rs 3,980 levels. The Rising channel pattern has pushed the counter over the selling zone, instigating a fresh upside to Rs 4,300 levels. The immediate support for the stock stays t Rs 3,900 levels.

The present formations highly suggest a move to a new all-time high. The current historic peak is at Rs 4,132 level. CLICK HERE FOR THE CHART