LIC Housing: A Correction That Refuses to End?

After completing the first upward leg from the March low near 483.70, LIC Housing Finance rallied sharply to 623.90. This rise is being marked as wave 1 or A, depending on whether the structure develops into an impulse or a zigzag.

After that peak, a correction was expected. Initially, price dropped to 565.40 in a clear abc formation, which could have marked the end of wave 2 or B. However, the market didn’t follow through with a strong rally. Instead, price began moving sideways in a choppy, overlapping manner — a strong clue that the correction wasn’t over.

This overlapping price action evolved into a WXYXZ structure, a complex form of correction.

Here’s how the structure now looks:

• The initial drop to 565.40 is being treated as wave a of a larger correction.
  
• The sideways consolidation that followed is marked as wave b.
  
• The current expectation is for a final wave c down — which would complete the full abc correction of a higher degree, labeled as wave 2 or B. The ideal target zone for wave c lies between 1x to 1.618x the length of wave a, projected from the end of wave b.
  

Support lies in the 568.80–532.65 zone. If price dips into this area and shows signs of reversal — particularly with bullish divergence on RSI — it could set the stage for the next leg higher in wave 3 or C.

The invalidation level for this count stands at 627.30. A sustained move above this level would negate the possibility of a wave c decline and instead suggest that a new impulsive leg has already begun.

Disclaimer: This analysis is for educational purposes only and does not constitute investment advice. Please do your own research (DYOR) before making any trading decisions.