LICI - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:55 pm

Technical Rating: 3.3

📊 Chart Patterns & Trend: LICI is trading below both its 50 DMA (884 ₹) and 200 DMA (889 ₹), showing weakness. Price action suggests the stock is in a reversal phase after failing to sustain near its 52-week high (980 ₹).

📈 Moving Averages: Current price (852 ₹) is below both 50 DMA and 200 DMA, confirming bearish sentiment. Resistance lies around 884–889 ₹.

📉 RSI: At 33.9, RSI indicates oversold conditions, suggesting potential for a short-term bounce but overall weak momentum.

📉 MACD: Negative at -13.0, confirming bearish momentum and lack of strong buying signals.

📊 Bollinger Bands: Price is near the lower band, signaling oversold territory and possible short-term recovery if volume sustains.

📉 Volume Trends: Current volume (43,20,163) is significantly higher than average weekly volume (18,20,029), showing strong participation despite weakness, which may indicate accumulation at lower levels.

🎯 Entry Zone: 830–850 ₹ (near support levels).

🎯 Exit Zone: 880–900 ₹ (resistance at DMA levels).

⚡ Momentum: Weak, oversold with potential short-term bounce but overall bearish bias.

Positive

• Low P/E ratio (10.5) compared to industry average (84.3), suggesting undervaluation.
• EPS at 80.8 ₹ highlights strong earnings power.
• ROCE (53.4%) and ROE (46.0%) reflect excellent efficiency and profitability.
• Dividend yield of 1.42% provides shareholder returns.
• Debt-to-equity ratio of 0.00 ensures financial stability.

Limitation

• Stock trading below both 50 DMA and 200 DMA, signaling weakness.
• RSI at 33.9 shows oversold but also weak momentum.
• MACD negative, confirming bearish trend continuation.
• Quarterly PAT declined (10,053 Cr vs 10,987 Cr), showing earnings pressure.
• DII holdings decreased (-0.02%), reflecting reduced domestic institutional support.

Company Negative News

• Quarterly PAT decline indicates near-term earnings weakness.
• DII stake reduction (-0.02%) shows declining domestic institutional confidence.

Company Positive News

• EPS strength and high ROCE/ROE highlight operational efficiency.
• FII stake increase (+0.02%) shows marginal foreign investor confidence.
• Strong dividend yield supports long-term investor sentiment.

Industry

• Industry PE at 84.3 is much higher than LICI’s PE (10.5), showing relative undervaluation.
• Insurance sector demand remains strong, supported by rising penetration and long-term growth potential.

Conclusion

⚖️ LICI is currently in a reversal phase with oversold signals. Short-term momentum is weak, with entry opportunities near 830–850 ₹ and resistance around 880–900 ₹. Fundamentally undervalued with strong ROCE/ROE and dividend yield, but technically cautious due to weak RSI, MACD, and moving averages. Best suited for long-term investors; traders should wait for reversal confirmation before entry.