Banks are the most important sector of the market so their performance, or lack thereof, gets our attention.
This week we’re seeing some interesting headlines about industry heavyweights HDFC Bank and ICICI Bank.
Let’s take a look at what’s happening.
First, let’s start with HDFC Bank, which continues to struggle with the 1,100 level of resistance on the daily and weekly chart. Notice how momentum also failed to reach overbought territory throughout its entire March-Present rally? Not exactly bullish action.
Click on chart to enlarge view.
And here are some of the headlines we’re seeing about the stock this week. Sold…to you?
On a relative basis, it’s clear that HDFC Bank is still one of the best-performing stocks relative to Bank Nifty, but relative to the Nifty 50 it’s broken a 12-year uptrend and is beginning to roll over. The largest stock in the sector underperforming the broader market is a headwind for Bank Stocks, and therefore, Equities as an asset class.
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