Technical Analysis

HDFC Life (₹597.8): Buy

Akhil Nallamuthu | Updated on November 26, 2019

HDFC Life logo   -  Twitter/HDFC logo

The Stock of HDFC Life Insurance Company has moved out of the price band between ₹565 and ₹593 that had been holding the stock for past two weeks on Monday and closed at ₹597.8.

The stock, after softening in the month of January and February this year began to trend upwards in March. The rally which began from ₹350 levels extended to the new lifetime high of ₹646.4 in October. This was followed by a moderation in price in November, where the correction dragged the stock to ₹565 followed by a sideways trend. With the stock breaching the resistance at ₹593 on Monday, it has opened the door for further strengthening.

The daily relative strength index is showing an uptick and has crossed above the mid-point level of 50; the moving average convergence divergence indicator has turned bullish as it has entered the positive territory. The stock has also inched above the 21-day moving average. These factors point to the bullish bias in the stock.

Hence, investors with short-term and medium-term perspective can initiate long positions in dips with stop-loss at ₹560. Potential targets are at ₹640 for the short-term and ₹690 for the medium-term.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

Published on November 26, 2019

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