HDFC Life Insurance Company gives inverted head and shoulders breakout

The stock of HDFC Life Insurance Company Limited has given a breakout of Inverted Head and Shoulders pattern on the daily timeframe. This breakout was confirmed by the more than 50-day average volumes. Additionally, the stock has formed sizeable bullish candle on breakout day, which adds strength to the breakout.

The major trend of the stock is bullish as it is trading above its weekly pivot and over its long-short term moving averages, that is, 20-day, 50-day, 100-day, and 200-day EMAs and these moving averages are in an ascending order, which suggests that the trend is strong. The leading indicator, 14-period daily RSI is currently quoting at 81.98 and it is in super bullish zone. The daily MACD is above the zero line and signal line. The MACD histogram suggests a bullish momentum. And most importantly, the MACD line crossed the prior swing highs.

The other volume-based indicators like OBV and Money Flow index are also very strong. Moreover, the daily ADX is very strong at 41.98. The -DI is much below the +DI and ADX is above the -DI. This shows the strong momentum in the stock. 

Going ahead, we expect the bias to remain positive as long as stock sustains above the Tuesday’s low of Rs 635 level. On the higher side, the level of Rs 700, followed by Rs 720, would be seen as the next resistance zone for the stock.

On Tuesday, the stock of HDFC Life Insurance Company closed at Rs. 670.05 per share, surged by 5.34 per cent. The stock opened at Rs. 638.70 per share and hit an intraday high of Rs. 674 and a low of Rs. 635 per share on NSE.