LIC Housing Finance Shows Bullish Momentum With Breakout Potential

LIC Housing Finance Ltd. operates in the provision of loans for various purposes, including the purchase, construction, repairs, and renovation of houses to individuals, corporate bodies, builders, and cooperative housing societies. Additionally, it offers to finance existing properties for business and personal needs and extends loans to professionals for the purchase and construction of clinics, nursing homes, diagnostic centres, office space, and equipment. The company, founded on June 19, 1989, is headquartered in Mumbai, India.

Technically, the stock price of LIC Housing Finance experienced a strong rally, reaching its peak at Rs 542.45 in the first week of June 2021. However, it subsequently underwent a retracement, finding support at a level that retraces over 61.8% from the impressive rally that began in the last week of May 2020, around the Rs 185.25 level.

Recent trading days have witnessed a surge in buying interest in the stock, leading to an upward movement after a bullish crossover of the 5-26 and 13-26 Daily Moving Average (DMA). Moreover, a breakout trendline has emerged by connecting the highs of the mid-week of October 2021 (at the Rs 462.50 level) and the mid-week of September 2022 (at the Rs 443.60 level), indicating a prolonged continuation price pattern spanning over 100 weeks.

During the last week, the stock rallied more than 7% and closed just below the breakout trendline, accompanied by substantial trading volumes of more than 14 million shares. Confirmation of the breakout will come with a close above this breakout level (Rs 430 level), sparking optimism among investors. Following the breakout, the stock holds the potential to reach Rs 560, representing a gain of approximately 30% from the breakout level (Rs 430). 

Swing traders and short-term investors are closely monitoring the performance of LIC Housing Finance Ltd. as it presents an enticing opportunity for further upside potential.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.