Insurance Stocks Hovering Near Highs
First, let's take a look at the broader market indices that steer us in the right direction. Nifty50 and Nifty 500 have been rallying non-stop since the correction in March this year. The 200-DMA sloping upwards and RSI momentum in bullish regime indicate strength in both indices.
Click on chart to enlarge view.
In order to analyse the Insurance subset we created an equally-weighted index of all the insurance stocks to analyse the trend in this space, calling it the ASC Insurance Index.
The ASC Insurance Index, as can be seen below, has been making higher highs and higher lows since March this year. Price halted recently at a crucial level of support and is bouncing back. RSI indicates that the momentum is in bullish regime alluding to the inherent strength in the stocks subset.
Now let's get into individual stocks in this space that have a good reward to risk ratio.
First up is HDFC Life Insurance. The stock has recently broken above a crucial resistance of 645. The 200-DMA is beginning to slope upward again indicating growing strength. We are positive in this counter above levels of 645 for a target of 860.
Let's look at ICICI General Insurance next. The stock moved above its all-time high and is consolidating at current levels. This is something we like to see in a stock where price continues to hold above its previous highs and consolidates at those higher levels. We are positive above 1420, with a target of 1660.
ICICI Prudential Life is currently trading at its resistance of 500. The stock is in a positive trend and the RSI has stayed away from oversold territory during corrections. We are bullish on this stock above 500 with targets of 530 and 630.
Last on our list is SBI Life Insurance. This is one stock we'd like to keep on our radar. It is yet to breach its immediate resistance of 920. RSI is indicating that momentum is in a bullish regime. We would above 920, with targets of 1030 and 1175.
We selected stocks that have been in an uptrend and are expected to outperform their peers. With that in mind, it is important to consider the suitability of reward to risk ratio and then act on these ideas, given your preference of timeframe.
The continuation of a positive trend in the broader market is expected to reflect well in leading sectors such as Financial Services as well as their subsets such as the Insurance stocks.
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Thanks for reading and please let us know if you have any questions!
Allstarcharts Team