Trading strategies for SBI Life, ICICI Pru, HDFC Life ahead of LIC IPO

Except for Max Financial Services other insurance related shares seem to be on a weak ground, indicate technical charts.

The abuzz with talks of the much-awaited initial public offer (IPO) of Life Insurance Corporation. The IPO is finally set to open fr subscription on May 4 in the price band of Rs 902 to Rs 949. Policy holders are likely to get a preferential treatment with a Rs 60 discount to the offer price.

Also WATCH: Should you take a slice of the LIC IPO pie? 

Presently, there are five major life insurance companies listed on the Indian bourses - namely - SBI Life Insurance Company, HDFC Life Insurance Company, ICICI Prudential Life Insurance Company, Star Health and Allied Insurance Company and Max Financial Services.

The foremost listed company, Max Financial Services has delivered over 800 per cent gains post listing in 2009. SBI Life Insurance and HDFC Life were listed in 2017 and are up 50 per cent and 76 per cent, respectively since debut. ICICI Prudential Life has surged 67 per cent post its debut in 2016.

However, the newly listed (December 2021) Star Health and Allied Insurance Company trades below its listing price, down 19 per cent.
 

Here’s the road ahead for insurance stocks ahead of the mega Life Insurance Corporation IPO:-
 
SBI Life Insurance Company Limited (SBILIFE)
Outlook: Avoid

The present chart structure reveals a negative bias for the stock. The “Double Top” formation, which is a bearish pattern, indicates weakness and a bear hold on the stock, shows the weekly chart. In addition, the “death cross” materialization strengthened the deteriorating sentiment and could see aggravated sell-off under Rs 1,050 mark, according to the daily chart. At the moment, the stock falls in the “avoid” category as it trades under the 200-day moving average (DMA).  CLICK HERE FOR THE CHART
 
HDFC Life Insurance Company Ltd (HDFCLIFE)
Outlook:  Needs to cross and defend Rs 550

Shares of HDFC Life Insurance Company are struggling to sustain above the 200-weekly moving average (WMA) currently set at Rs 558.40 level. The stock did manage to cross this level at the start of April series, but failed to add a follow-up momentum. The trend may lose strength going ahead, if it continues to slide further. On a broad perspective, the stock needs to cross and defend the Rs 550 mark. On breakout the next upside is positioned over Rs 600 level, shows the weekly setup.  CLICK HERE FOR THE CHART
 
ICICI Prudential Life Insurance Company Ltd (ICICIPRULI) 
Outlook: Gradual upside till 50-DMA and MACD stays supportive

The recent correction in ICICI Prudential Life Insurance Company received a robust rebound that scaled the 100-DMA. Yes, it did fail to infiltrate the selling pressure at 100-DMA, but as long as it manages to defend Rs 497, its 50-DMA, the reversal could surprise the market participants. Secondly, the Moving Average Convergence Divergence (MACD) is above the zero line, it did make a negative crossover, however until it trades above the line, the bullish bias may re-gain upward momentum.  CLICK HERE FOR THE CHART
 
Star Health and Allied Insurance Company Ltd (STARHEALTH)
Outlook: Rs 630 may act as a last support

The stock has drifted under the 50-DMA placed at Rs 692.80. The strength and momentum seems to be losing interest while trading below 50-DMA. The next major support for the stock comes at Rs 630. If it violates that, the decline could see added sell-off.  The MACD is sliding downward, breaching the zero line. Such signals are not good for the active stock, as per the daily chart.  CLICK HERE FOR THE CHART
  
Max Financial Services Limited (MFSL)
Likely target:  Rs 900 (after conquering Rs 800)
Upside potential:  12%

The daily price action hints at a resistance of Rs 800, which is the “Lower Low, Lower High” violation mark. When this stock manages to infiltrate that hurdle with a decisive move, the breakout could see a positive uplift to Rs 900-mark. Right now, the support for the stock exists at Rs 720. CLICK HERE FOR THE CHART