HDFC Life Insurance has emerged from consolidation with heightened volume activity. Brokerages ICICI Securities and Axis Securities have both issued a “buy” recommendation on the insurer, identifying it as their top technical pick for the week.
HDFC Life has demonstrated remarkable resilience amid recent market volatility, consistently outperforming the broader market.
As per ICICI Securities, the stock initiated the series with one of the highest open interests seen in the past nine months. “Throughout the series, notable outperformance was observed amid substantial closures, indicating continued short covering in the stock. Furthermore, the stock has concluded above its maximum Call base of 630 strike, indicating a potential extension of the upward movement,” stated ICICI Securities.
The brokerage suggested that the momentum from short-covering could propel the stock towards Rs 670 in the upcoming sessions. They recommended purchasing HDFC Life March futures within the range of Rs 627-631, setting a target price of Rs 672, and establishing a stop loss at Rs 604.9.
On the daily chart, HDFC Life has emerged from a consolidation phase, characterized by a ‘Rounded Bottom’ pattern observed around the 629 level.
Axis Securities noted, “The surge in volume activity during the breakout suggests heightened participation, indicating significant interest in the stock’s upward momentum.”
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Axis Securities noted that the stock maintains its position above the 20, 50, 100, and 200 Simple Moving Averages (SMAs), signaling a positive bias. Additionally, the daily Relative Strength Index (RSI) is in bullish territory, implying a potential upside to the 665-685 levels over a holding period of three to four weeks.
