Buy LIC Housing Finance; target Rs 325: ICICIdirect.com

ICICIdirect.com is bullish on LIC Housing Finance and has recommended buy rating on the stock with a stoploss of 246 for a target of Rs 325 in its December 14, 2012 research report.

“LIC Housing Finance has remained a standout performer during various market cycles in the last one and half years. We believe the stock is likely to witness good buying interest in the coming sessions on the back of rejuvenated interest in finance stocks. The stock remained subdued in the recent period but did not breach the important support of 240. It finally reverted upwards.”

“In the last year, the stock has found support near 240 levels on multiple occasions. In the recent profit booking leg from 280 to 245 levels, significant open interest was added in the stock. With a sharp recovery, 25% open interest was closed, which indicates closure of short positions. As current open interest in the stock is still on the higher side, we expect further covering to be seen. This would lead the stock towards 325 levels.  Sectoral leaders like HDFC Ltd made life-time highs while stocks like IDFC and LIC Housing Finance are observing fresh upsides. Despite intermediate profit booking in the broader market in the last few sessions, LIC Housing has remained quite firm and witnessed closure of short positions. In addition, in the last month, good delivery buying to the extent of 200% was seen in the range of 250-260 levels.”

“All the important moving averages (50, 100 and 200 DMA) are placed near 255 levels, which would remain an important support on downsides. We expect the recent pullback above these averages to keep the stock in upward momentum towards 325 levels,” says ICICIdirect.com research report.

Institutional holding more than 40% in Indian cos

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