LIC Housing Finance forms evening doji star pattern
The stock of LIC Housing Finance Limited has formed a reversal shooting star candlestick pattern as on weekend of January 24, 2020 and thereafter, witnessed correction. The correction was nearly 62 per cent from the top. However, considering the daily time frame, the stock is trading in counter trend consolidation since the last 16 trading sessions and formed a bearish flag pattern.
On Tuesday, the stock has formed a reversal evening doji star candlestick pattern near the upper trendline of bearish flag pattern and coincides with 50-day EMA, which suggest that the bears are taking control near the resistance zone. Along with this bearish formation, the stock has also managed to close below its weekly pivot.
Among the momentum indicators, the 14-period daily RSI cooled off after touching the zone of 55 and at present, its reading is 50.27. The daily stochastic has given a bearish crossover, which indicates downside momentum. Moreover, on the weekly directional index, the bearish strength is still higher than the bullish strength as +DI is much below -DI.
Going ahead, Monday’s high of Rs 290.50 will be a major hurdle for the stock. While on the downside, we expect the stock to touch the lower trendline of flag pattern, which is currently placed at Rs 230 and in case it sustains below this level, it may touch its recent swing low of Rs 185.25.
On Tuesday, the stock of LIC Housing Finance Limited closed at Rs 262.30 per share, dipped by 5.95 per cent. The stock opened at Rs 273.30 per share and hit an intraday high of Rs 273.30 and a low of Rs 259 per share on NSE.