LIC Stock Analysis: 12-17% Potential Upside In 3-4 Weeks

Unlocking Potential: Axis Securities Bullish on LIC Stock with 12-17% Upside

Axis Securities recently shared some positive insights about Life Insurance Corporation of India (LIC) stock. According to them, LIC stock has broken through a significant resistance level at Rs 754, suggesting a positive trend. The brokerage recommends buying LIC within the range of Rs 790-774, with a target price of Rs 874-916. This implies a potential upside of 12-17% over the next 3-4 weeks.

The technical analysis from Axis Securities indicates a strong breakout with increased trading volume, indicating active market participation. The current price stands at Rs 801.20, showing a slight decline of 1.73% at 9.36 am.

Axis Securities highlights positive indicators, such as the bullish trajectory of the weekly and daily Relative Strength Index (RSI), suggesting a favorable market bias. RSI is a tool used in technical analysis to assess a security’s recent price changes and identify overvalued or undervalued conditions.

The previous performance of LIC stock also reveals a bullish reversal pattern called an Inverted Head & Shoulder, observed at Rs 680 on the weekly chart in late November 2023. This pattern implies a potential upward trend in the stock’s price.

Recent developments in the insurance sector, particularly a draft note from the Insurance Regulatory and Development Authority of India (IRDAI) proposing changes in surrender value calculations for non-linked insurance products, have impacted insurance stocks. Analysts mention potential negative effects on life insurance companies’ Value of New Business (VNB) margins due to proposed caps on surrender penalties.

Kotak Institutional Equities emphasizes the need for clarity on specific ratios for calculating surrender values. Nomura India suggests that if accepted, the proposal may lead life insurance companies to adjust their portfolios for profitability, affecting product design, pricing, and viability for non-linked products.

Please note that this information is for informational purposes only and should not be considered as investment advice. It is recommended to consult with a qualified financial advisor before making any investment decisions.