LIC, HDFC Life: Insurers stocks log up to 20% gain in July; what next?

Technical charts suggest that bias for insurance shares, barring Star Health, remain upbeat; hence, these stocks could see up to 12 per cent further upside from current levels.

Shares of insurance related companies ended the month of July on a high note on Wednesday amid hopes of a rollback in the GST levy. Stocks like HDFC Life, SBI Life and ICICI Prudential Life gained up to 3 per cent yesterday.

The buying at these counters were attributed to reports of Nitin Gadkari, Union Minister for Road Transport and Highways in India, requesting Finance Minister Nirmala Sitharaman to remove the 18 per cent goods and services tax (GST) on life and medical insurance premiums.

Analysts said the proposal was a sentimentally positive trigger for related stocks, but suggested investors should wait for the Finance Ministry's move on it before taking any investment decision. READ MORE

Meanwhile, overall the month of July was a bullish month for shares of insurance firms, as they surged up to 20 per cent as against a 3.4 per cent gain on the S&P BSE Sensex. 

Against this background, here are the key support and resistance levels for insurance-related shares as per the technical charts.

Life Insurance Corporation (LIC) 

Current Price: Rs 1,214

Upside Potential: 7.9%

Support: Rs 1,160; Rs 1,125

Resistance: Rs 1,258; Rs 1,283

Last week, LIC gave a fresh breakout on the weekly scale as the stock closed above the higher-end of the Bollinger Bands. Further, the stock has rallied 19 per cent in the month of July. The short-term bias for LIC will remain positive as long as the stock sustains above Rs 1,160 levels. Break and sustained trade below Rs 1,160 can trigger a corrective move towards Rs 1,125.

On the upside, the stock can potentially rally to Rs 1,310 levels, with interim resistance seen around Rs 1,258 and Rs 1,283. CLICK HERE FOR THE CHART

HDFC Life Insurance Company

Current Price: Rs 710

Upside Potential: 12%

Support: Rs 695; Rs 685; Rs 665

Resistance: Rs 765; Rs 781

HDFC Life stock ended July 2024, with a strong gain of 20.2 per cent - its biggest-ever single month gain till date. The formation of a long-bodied bullish candle implies a bullish bias for the stock in the medium-term. 

Further, the stock is seen making higher-highs and higher lows and moving in a rising channel on the daily scale. The near-term bias for the stock is expected to remain bullish as long as the stock trades above Rs 695 levels. 

On the upside, the stock can potentially rally to Rs 795 levels, with interim resistance seen at Rs 765 and Rs 781. Support on the downside, can be seen at Rs 685 and Rs 665 levels. CLICK HERE FOR THE CHART

SBI Life Insurance Company

Current Price: Rs 1,779

Upside Potential: 9.3%

Support: Rs 1,704; Rs 1,662

Resistance: Rs 1,872; Rs 1,909

SBI Life Insurance stock logged its second-best monthly gain in July, up 17.5 per cent. The overall bias for the stock is likely to remain upbeat as long as the stock sustains above Rs 1,662 levels. Near support for the stock is visible at Rs 1,704.

Key momentum oscillators are clearly in favour of the bulls across time-frame. Hence, any dips at the counter are likely to be bought in. On the upside, SBI Life can potentially rally to Rs 1,945; with interim resistance seen at Rs 1,872 and Rs 1,909. CLICK HERE FOR THE CHART

ICICI Prudential Life Insurance

Current Price: Rs 735

Upside Potential: 11.8%

Support: Rs 708; Rs 703; Rs 684

Resistance: Rs 789; Rs 805

ICICI Prudential Life Insurance rallied 21.5 per cent in July. The bias at the counter is likely to remain bullish as long as the stock trades above Rs 684 levels. with near support for the stock seen at Rs 708 - Rs 703 levels.

On the upside, the stock can potentially surge to Rs 822. On its way up, interim resistance for ICICI Prudential Life stock can be expected around Rs 789 and Rs 805. CLICK HERE FOR THE CHART

Star Health and Allied Insurance Company

Current Price: Rs 611

Upside Potential: 5.4%

Support: Rs 585; Rs 557

Resistance: Rs 619 

Star Health stock has relatively underperformed its peers, as it gained just 8.5 per cent in July. On the charts, the stock is consistently seen facing resistance around its super trend line on the weekly scale, which stands at Rs 619. Above which, the stock is expected to face resistance at Rs 644.

On the flip side, failure to overcome the hurdle at Rs 619 could see the stock retreat in the near-term. As such, the stock may dip towards its 100-WMA (Weekly Moving Average) at Rs 585 or seek support around the 20-WMA at Rs 557. CLICK HERE FOR THE CHART