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The stock of LIC Housing Finance gained 5.7 per cent with above average volume on Monday, bouncing up from a key support level of ₹280. This rally has surpassed the 21- and 50-day moving averages and has given traders with a short-term perspective an opportunity to buy the stock at current levels. Since the stock took support at ₹186 in late March this year, it has been in an intermediate-term trend uptrend. But, the stock had encountered a resistance at ₹323 in late August and started to consolidate in the wide band between ₹260 and ₹323 thereafter.
The recent up-move has strengthened the bullish momentum with the consolidation phase and the stock has potential to trend upwards and reach the upper boundary. The daily relative strength index is charting higher in the neutral region and weekly RSI as well. The daily price rate of change indicator has entered the positive terrain from the negative implying buying interest.
Overall, the short term outlook is bullish for the stock. Targets are ₹312 and ₹318. Traders with a short-term view can buy the stock with a stop-loss at ₹292. (Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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