Technical Analysis

Indian Oil Corporation (₹153.7): Sell

Yoganand D BL Research Bureau | Updated on April 03, 2019 Published on April 03, 2019

The stock of Indian Oil Corporation fell by 2.8 per cent with low volume on Wednesday breaching the 21-day moving average. Investors with a short-term horizon can sell the stock at current levels.

After a short-term uptrend from the February low of ₹121, the stock encountered a key resistance at ₹165 in late March this year. Subsequently, the stock changed direction triggered by negative divergence in the daily relative strength index and price rate of change indicator and began to decline. Moreover, the key resistance at ₹165 also limited the upside. There has been decline in daily volume over the past one week.

The short-term uptrend is weakening. The stock has formed a bearish engulfing candlestick pattern in the weekly chart that also backs the trend reversal. The stock has potential to extend the fall in the ensuing trading sessions. The daily RSI has slipped into the neutral region from the bullish zone and the weekly RSI has re-entered the neutral region.

The daily price rate of change indicator hovers in the negative terrain implying selling interest. The near-term view is bearish for the stock. Targets are ₹147.5 and ₹144.5. Traders can sell the stock with a stop-loss at ₹157.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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