HDFC Bank forms record session count pattern; bulls may take a breather

The stock of HDFC Bank Limited has witnessed nearly 21.24 per cent upside from the low of September 24. During this northward journey, the stock has marked the sequence of higher highs and higher lows for ten consecutive trading sessions, which resulted in the formation of a bullish record session count candlestick pattern thereby, further suggesting that the bulls may take a breather.

This is an extremely rare pattern and usually occurs at the top of an uptrend. Generally, we rely on the typical momentum indicators or oscillators for recognising an overbought and oversold condition of the stock. However, this Japanese candlestick pattern gives us a unique way to recognise when the momentum is waning out.

The stochastic oscillator is also supporting the same phenomenon as it has given a bearish crossover on the daily timeframe. The relative strength index (RSI) has cooled off after touching the zone of 77-80 and currently, quoting at 71.73 level. These two setups are also indicating a pause in the uptrend.

Going ahead, immediate support for the stock is in the zone of Rs 1,165-Rs 1,159 as it is a confluence of 38.2 per cent Fibonacci retracement level of its prior upward move (Rs 1,025-Rs 1,242.75) and short-term 8-day EMA level. While on the upside, Rs 1,240-Rs 1,260 will be a major hurdle for the stock.