HDFCAMC

Strong Rally Faces Overbought Pressure; Short-Term Pullback Likely

Technical Analysis:

– Short-Term Caution After Strong Rally After taking firm support at the 200-day moving average on 14th July 2025, HDFC AMC witnessed a strong upward momentum. The stock surged 3.77% on 15th July, marking the beginning of a short-term rally. From 15th to 18th July, the stock consistently delivered positive daily closes, signaling bullish sentiment. However, current technical indicators suggest caution. On 18th July, the candlestick closed significantly above the upper Bollinger Band, and the Relative Strength Index (RSI) has now climbed to 74, placing the stock firmly in the overbought territory. These signals often precede a price correction or consolidation. A pullback may be expected in the coming sessions, potentially toward the 20-day moving average, which could act as a near-term support level. Meanwhile, the key resistance to watch remains at ₹5630. Sustained trade above this level with volume support may reinstate the bullish bias. Insight: While the recent momentum is impressive, the current overbought condition warrants caution for fresh entries. Traders may consider booking partial profits or trailing stop-losses. A healthy correction toward the 20-DMA would strengthen the stock’s base for the next leg of the rally.