Whalesbook
LIC Stock Forms 'Death Cross' Amid Stake Sale Buzz
Life Insurance Corporation of India (LIC) shares are showing a bearish trend, with the stock down nearly 1% this month following a 6% slide in December. This tepid performance coincides with significant government divestment plans.
Technical Signal Sparks Concern
The stock witnessed the formation of a 'Death Cross' on its daily chart today. This technical indicator occurs when a short-term moving average, the 50-day moving average (50-DMA), drops below a long-term moving average, the 200-day moving average (200-DMA). Generally, a Death Cross is viewed as a bearish signal, suggesting potential resistance at lower price levels and a possible downtrend.
Key Moving Averages Shift
LIC's 50-DMA is now trading at ₹879.19, falling below the 200-DMA, which stands at ₹880.33. This specific Death Cross formation on LIC's daily chart follows a gap of over six months, with the preceding 'Golden Cross' (where the 50-DMA crossed above the 200-DMA) observed on June 27, 2025. The stock has been trading below its 200-DMA since December 8, 2025, a period that typically indicates a longer-term bearish sentiment. The supertrend line indicator also shows the stock below it since December 3, 2025.
Weekly Chart Shows Resilience
Despite the daily chart's bearish signals, LIC's weekly chart indicates a period of consolidation. The stock has been trading around its 50-week moving average (50-WMA) since May 2025. Furthermore, it has held above the supertrend line on the weekly chart since its breakout in May 2025, suggesting some medium-to-long term support. The 50-WMA is currently at ₹862.16, with the weekly supertrend line at ₹815.15.
Government Stake Sale Plans
Adding to the market sentiment, the Indian government, which holds a 96.5% stake in LIC, plans to offload approximately 6.5% of its equity. Reports suggest the first tranche of this divestment could occur before the end of the financial year 2025-26. This potential sale overhang continues to weigh on investor confidence.