ICICI Lombard, HDFC Life: What do charts indicate for insurance stocks?

Major stocks are facing resistance at a 100-day moving average (DMA).

Insurance Regulatory and Development Authority (IRDAI) on Tuesday withdrew a circular that asked general insurance companies to provide long-term package covers in the motor segment, offering third-party and own-damage insurance for three and five years to new two-wheelers and four-wheelers, with effect from August 1, 2020, on grounds that it is creating issues for insurers and also making it unaffordable for some section of vehicle owners. READ MORE

Meanwhile, new business premiums (NBP) of life insurance companies recorded negative growth for the second consecutive month in May, owing to Covid-related disruptions. 

In the wake of these developments, here's a look at how insurance stocks look on charts and what should be your trading strategy.

ICICI Lombard General Insurance Co Ltd (ICICIGI): The weekly and daily chart indicate a strong positive bias. If the counter crosses Rs 1,380 levels, which is its mild resistance, it will rally towards Rs 1,440 and Rs 1,460 levels. The support remains at Rs 1,254 - its 200-day moving average (DMA). The counter is trading above all the major moving averages i.e 50-DMA, and 100 DMA. CLICK HERE FOR THE CHART

HDFC Life Insurance Company Ltd (HDFCLIFE): As the scrip is continuously making efforts to conquer its 100-DMA, the support levels have witnessed multiple buying attempts earlier. This shows minimum downside for the HDFC Life from the current levels. The immediate support comes in at Rs 495 on a closing basis. The upside is capped at 100-DMA till RSI finds resistance at 60 value. CLICK HERE FOR THE CHART

SBI Life Insurance Company Ltd (SBILIFE): This stock is resisting at 100-DMA placed at Rs 800 levels. The medium-term support remains at Rs 665 levels with immediate resistance at Rs 718, which is 50-DMA, as per the daily chart. The counter may see profit booking, however till Rs 718 is held, one can expect buying momentum to emerge. The breach of Rs 800 levels decisively, may see a rally towards Rs 850 levels. CLICK HERE FOR THE CHART

ICICI Prudential Life Insurance Company Ltd (ICICIPRULI): This counter needs to cross multiple resistances of Rs 420 and Rs 409 to rally further. The downside support remains at Rs 380 levels. The Relative Strength Index (RSI) and MACD are trading in the positive crossover. The trend indicates a positive bias with counter making efforts toward Rs 438, which is its 200-DMA. CLICK HERE FOR THE CHART