LIC, Indiabulls Housing Finance struggle on charts; HDFC eyes Rs 2,700-mark

Shares of LIC Housing Finance today slipped below the 200-WMA after falling over 10 per cent. Now, four out of five leading housing finance stocks are trading below the 200-WMA.

With the exception of LIC Housing Finance and Housing Development Finance Corporation, other listed players in the housing finance segment such as PNB Housing Finance, Indiabulls Housing Finance and Can Fin Homes traded beneath the 200-weekly moving average (WMA) as of Tuesday, November 01, 2022.  

On Wedesday, LIC Housing Finance shares too slipped below the 200-WMA, after the stock hit the 10% lower circuit on reporting disappointing earnings for Q2FY23. Further, the regulatory body RBI too levied a Rs 5 lakh penalty on the company for the non-compliance of provisions issued by National Housing Bank (NHB). READ MORE

PNB Housing Finance, Indiabulls Housing Finance, and Can Fin Homes were down between 0.5  - 2 per cent in the intraday deals on Wednesday, barring Housing Development Finance Corporation, which, traded 0.5 per cent higher.

Thus, four out of the five leaders in housing finance segment now trade under the 200-WMA, which market participants closely monitor when making bullish or bearish bets. Technically, whenever a stock loses its 200-WMA support, the sentiment towards the stock weakens, gradually losing the grip as it enters a bear phase. And when most of the stocks in any segment fall under 200-WMA, the overall sector trend also becomes more lucid.

Here’s an outlook on the Housing Finance stocks, post entry of LIC Housing Finance in the 200-WMA breach:-

LIC Housing Finance Ltd

Outlook: Stock must retrace above Rs 373 within next two to three sessions

The stock price of LIC Housing Finance slipped beneath the 200-WMA on Wednesday, prior to which it had soared 20 per cent since mid-August this year. The 200-WMA is positioned at Rs 373, and acted as a support during the said period. A breach of this mark indicates weakness and draws more declines for the stock. The stock has also negated its 200-day moving average (DMA), shows the daily chart.

To retrieve back the positive bias, LIC Housing Finance must retrace over the 200-WMA within the next two to three trading sessions flaunting resilience. Only then could the stock rally towards Rs 390 and Rs 400 levels. CLICK HERE FOR THE CHART

PNB Housing Finance Ltd (PNBHOUSING)

Outlook: Crossing Rs 485-mark, could trigger a rally to Rs 600

While there is a bullish formation of an “Inverse Head and Shoulder” on the weekly chart, aligned with the technical indicator the Moving Average Convergence Divergence (MACD), which crossed the zero line upward, the bulls are only ready to pull strings once the stock crosses Rs 485 mark, its 200-WMA. 

The trend points bullishness, nonetheless the momentum looks to see elevation only over 200-WMA. The immediate supports are Rs 400 and Rs 380 levels. Above 200-WMA, the counter could fly to Rs 600, its next impending hurdle. CLICK HERE FOR THE CHART

Indiabulls Housing Finance Ltd (IBULHSGFIN)

Outlook: Trend is weak and sideways

Shares of Indiabulls Housing Finance not only trade beneath 200-DMA, but have fallen gravelly under the 200-WMA too. The immediate barrier for the stock comes at Rs 150 and only upon crossing this mark, the trend could see a next move to Rs 185 level. The immediate supports are at Rs 110 and Rs 100 levels. As the volumes have remained sluggish, the current sideways trend shows no major inclinations. CLICK HERE FOR THE CHART

Repco Home Finance Ltd (REPCOHOME)

Outlook: Rs 268 - a major hurdle

After mid-2021, Repco Home Finance shares made a robust attempt to surpass the 200-WMA at Rs 268 in August this year, the efforts, however, turned futile and the stock borne the consequences plummeting over 22 per cent from the August highs. The next support for the stock is seen at Rs 190, and as long as the stock upheld this mark, the trend could regain optimism and strike back the 200-WMA in the future. CLICK HERE FOR THE CHART

Housing Development Finance Corporation Ltd (HDFC)

Outlook: Stock eyes Rs 2,700 mark

HDFC stock has entered an upward bias post crossing Rs 2,500 level. The stock must hold the ground over this mark to rally further. The next hurdle is at Rs 2,700 level, shows the weekly  chart. The support comes at Rs 2,420 and Rs 2,400 levels. The medium-term outlook is positive as the stock trades over both crucial moving averages of 200-WMA and 200-DMA located at Rs 2,192 and Rs 2,311 respectively. CLICK HERE FOR THE CHART