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The stock of LIC Housing Finance tumbled 4.5 per cent on Tuesday, breaking a flag pattern that is a continuation pattern. Investors with a short-term horizon can consider selling the stock at current levels. Since encountering a key resistance at ₹510 in early January this year, the stock has been on a short-term downtrend. While trending down, the stock conclusively breached a key support at ₹460 by declining 3.7 per cent on February 2. This fall has also decisively breached the 200-day moving average.
Following a small pause at ₹445, the stock has resumed its short-term downtrend. The relative strength index continues to feature in the bearish zone and weekly RSI is on the brink of entering this zone. Both the daily and weekly price rate of change indicators are hovering in the negative terrain. The stock can extend its downtrend and reach the price target of ₹410 and ₹400 in the coming trading sessions. Sell the stock with a stop-loss at ₹433.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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