Short sellers retreated sharply from HDB over the past month while options traders shifted to a defensive stance. The diverging signals paint a complex picture for HDFC Bank Limited.
Short interest plunged 37% over the past month to 8.14 million shares as of March 31. The decline accelerated in recent weeks, with a 25% drop over the past seven days alone. Days to cover sits at just 1.0, reflecting light positioning relative to trading volume.
Cost to borrow collapsed alongside the exodus. CTB fell 53% over the past week to 0.25% APR. The metric is down 43% over the past month. Utilization remains minimal at 0.65%, well below the 52-week high of 23.38%. The low figures indicate ample share supply for shorting.
Options traders moved in the opposite direction. The put-call ratio jumped to 0.553 on April 21, up 51% from the 20-day average of 0.383. The spike registers 2.57 standard deviations above the mean. For most of April, the PCR held steady in the 0.34-0.37 range before the recent surge.
Shares closed at $26.45 on April 21, down 1.3% over the past week but up 4.2% over the past month. The stock recently reported earnings on April 18 and 21, with the next event scheduled for July 17.
ORTEX Stock Scores show strength in growth (82.7) and quality (73.5), but weaker momentum (42.2) and value (35.0) readings. The total score of 71.1 suggests a fundamentally solid company facing near-term headwinds.
The short score stands at 26.4, indicating below-average short activity relative to historical norms. The combination of falling short interest, collapsing CTB, and elevated put activity suggests bears are covering equity shorts while hedgers rotate to options for downside protection.
This is not financial advice. ORTEX data may contain inaccuracies.
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