LIC HOUSING FINANCE settled at 321.90 up by 5.78% on Tuesday.
Stock had been staying in a consolidation phase that took shape of an ascending
triangle and in today’s session it broke through the resistance line of this triangle
consolidation and settled well above key resistance of 312 suggesting dominance
of bulls. Stock has been staying above its 9 days SMA on daily chart keeping a
short-term bullish trend in picture.
Stochastic is now approaching overbought territory along
with bullish cross above its signal line suggesting a strong bullish momentum.
MACD has been staying in positive territory and now its parting upward from its
signal line suggesting development of fresh bullish momentum.
Direction and momentum are two important components for any
chart to anticipate future price movement and current trend and momentum on
chart provided above is suggesting bullishness.
Breakout of triangle pattern can be used to determine potential
destination for current move and if the base of tringle added in to breakout
then areas of 355-360 can be considered potential target for the current move
as long as price move is supported by strong bullish momentum as described
above. Tweezer bottom is formed near 298 zones which is just above the moving average
which is also sloping upward. Any failure of 298 might violate on going bullish
move and then weakening of upward swing can be seen. As long as price holds
above 298 this move is likely to remain intact until stock hits 350-360 zones.
Based on option data for current expiry today huge long
build was seen in 320, 330 and 340 strike call options where as huge short
covering seen in 310 and 300 strike call options. On put side put options
above 320 strike doesn’t have enough open interest whereas short unwinding seen
in 270 and 280 strikes where as fresh put writing is happening in 300 and 310
strike put options.
Short unwinding in OTM puts and short covering ITM calls is
favoring a scenario where market shifts its resistance upward and is sign of
bullish move.
Based on developments on charts and option data available on
NSE’s website on can look for buying opportunities in LICHSGFIN around 308-305
zones with a protective stop loss below 298 for a potential target around
350-360 in short term.
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