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We recommend a buy in LIC Housing Finance from a short-term trading perspective. It is apparent from the charts of LIC Housing Finance that after encountering significant resistance at Rs 350 in early September, it began to decline and was on an intermediate-term downtrend. This downtrend prolonged till it found support around Rs 150 in early December. The stock, however, subsequently made a remarkable upward bounce from this support level and penetrated its 21-day moving average.

The stock breached its intermediate-term down trendline as well as the 50-day moving average during mid December. Since early December, the stock has been trending upward. Both the daily and weekly relative strength index (RSI) are rising in the neutral region towards the bullish zone. Furthermore, the daily moving average convergence and divergence is featuring in the positive territory.

We are bullish on the stock from a short-term perspective. We anticipate the stock to rally until it hits our price target of Rs 251 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 215.

Yoganand D.

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