Short-term traders can look to buy the stock now for a target above 2100 levels in the next 2-4 months, suggest experts.
The insurance stock witnessed a breakout after witnessing a price-wise correction for the past 2 years. The stock was trading around 1600 levels in September 2021, but it failed to hold on to the momentum.
The stock witnessed selling pressure which pushed the stock towards 1000 levels in the March-May 2023 period.
The stock witnessed a swift recovery after bottoming out in May 2023. It reclaimed 50-DMA and then 200-DMA in June and September 2023 respectively.
The stock witnessed a breakout from 1600 levels in the last week of February when it hit a record high of Rs 1739 on 28th February 2024.In terms of price action, the stock is trading below 5,10 and 20-DMA but above 30,50,100 and 200-DMA on the daily charts, which is a positive sign for the bulls.
ETMarkets.comThe daily Relative Strength Index (RSI) is placed at 57.9. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed.
“ICICI Lombard General Insurance stock has given an all-time high breakout of the cup pattern formed during the last two years. The breakout happened a few days back with rising volumes and prices are now sustaining above the breakout levels,” Aditya Thukral, Founder & Analyst for AT Research & Risk Managers, said.
“The stock prices are rallying with strong momentum and the strength can be witnessed with the RSI indicator which is also reading at all-time highs,” he said.
The price structure of higher highs and higher lows suggests an intact uptrend on short-term as well as long-term charts.
“An uptrend continuation is expected to happen in the stock prices where longs should have stop losses below 1492 on a weekly closing basis which is the previous resistance of the ongoing rally and is now working as strong support,” highlights Thukral.
The stock is well placed above all the major exponential moving averages viz. 50-day, 100-day and 200-day.
“This is the start of a new bull market in the stock and the breakout in prices along with RSI has strong bullish implications. However, conservatively, one can easily expect the levels of 2100 to be seen in the coming 2 to 3 months,” he recommended.
Analyst Disclaimer: The Research Analyst and its associates/relatives may from time to time, have a long or short position in the securities or derivatives thereof of companies discussed herein.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)