IOC short term setup

Aug 21, 2020

IOC is looking weak, in terms of price and volume correlation. It was consolidating in a range and then gave a break out of the range on 19th August. The volumes, then, were above the 100 DMA, suggesting some sort of strength from the buyers. After that breakout, price did continue to move higher, and volumes did expand as the price moved higher. But in the last 2-3 sessions, there have been various strong signs of sellers entering IOC, in form of bearish candles on back of volume expansion. This volume expansion has been more than the volume expansion during the bullish phase, suggesting supply is greater than demand. I will personally wait for more confirmation, such as bearish engulfing candle on back of volumes, to initiate any type of short trade. Another confirmation is the break of the upward trendline, marked with the callout box. Another decisive level is 90.5. There have been signs of supply near this level, as price has reversed from the level many times. If this level is broken with strength, then this would be a sign of supply being absorbed by buyers that are stronger than the sellers. If this were to happen before the trendline is broken, then the short trade setup should be cancelled, and the trend will continue to be bullish. Upside target would be 94.85 and downside target is 84.85. Risk should be managed according to your personal risk appetite.

I am not a SEBI registered investment advisor and hence do not follow my analysis blindly.
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Stock market is risky and you can lose a lot of your capital.
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Hope I can help you become a profitable trader!
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