LIC Housing Finance fell almost 4 per cent, breaching an immediate support as well as the 21-day moving average at around Rs.490. Moreover, the short term uptrend line, which was intact since mid-June, was also broken. This gives a good opportunity to traders with a short term perspective to sell the stock at current levels.
Following a short-term uptrend, the stock registered an all-time high at Rs.526 last week. Subsequently, the stock changed direction, triggered by negative divergence in the daily relative strength index and started to decline. The daily RSI has entered the neutral region from the bullish zone and the weekly RSI follows suit. The daily moving average convergence divergence indicator has signalled a sell.
The short-term outlook is bearish. It can continue to fall and reach the price target of Rs.459 and then to Rs.449 in the upcoming trading sessions. Sell the stock with a stop-loss at Rs.489 levels.
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