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Trading Opportunity - Indian Oil Corporation (IOC), Detail Analysis With Charts

Trading Opportunity - Indian Oil Corporation (IOC),  Detail Analysis With Charts

It's been a very volatile week for all the market participants this week and I'm sure each one of them have either gained or lost something in this choppy market. Well, that's the nature of stock market. Today we will discuss about an opportunity which you should pay attention. I always to try to find opportunities in the market and present before you so that even if we don't take our chances, we can't say we didn't know about those opportunities. So we will discuss about an oil marketing company Indian Oil Corporation i.e. IOC.

Company Background

Before going to the detail let's check few basic things. It is the largest commercial oil company in the country. It has earned a net profit of INR 21346 crore in FY 2017-18. It is ranked first in Fortune India 500 list for the year 2016 and 168th in Fortune’s "Global 500" list of world largest companies in the year 2017.

Fundamental Check

This company is currently trading with a P/E of 8.11 while the industry P/E is 15.02 which making the share attractive from the investors point of view. One of the important factor to look at is its debt. It will put hurdle in company's growth. There is more than INR 55000 crore debt on company's balance sheet. This company is well known for its dividend policies as it is one of the most loved stock for dividend seeking investors.


One of the famous chart pattern which we all know is symmetrical triangle pattern. Normally this chart pattern is a sign of bearishness and it makes the stock weak on technical analysis. There are thousands of companies and we all can't pick all companies at the same time to check their charts and find opportunities. But this which I've found, I want to share with you. Let's have a check on its daily chart.

From the daily charts the triangle is clearly seen. The price action of this stock is hovering between  125- 150. This stock has stayed in this range for approximately 5 months and slowly making a symmetrical triangle pattern. Let’s check its weekly chart.

Even in weekly chart the same pattern is showing which is showing bearishness in the chart. This means if the stock breaks the boundary of the triangle in downside then it will go further downwards and make new lows. Though as per my analysis fundamentals of the stock is not bad but still we have to check technical along with the fundamentals.

Brokerage houses have already downgraded this stock for its poor performance in Q3 of 2018. Big brokerage house CLSA has cut the target price of this stock to  120 which may be in our favor and favoring this chart pattern. So there can be a short selling opportunities in future market and if you have this stock in your portfolio then you should remain cautious and try to hedge your position.

So this is for today and I’ll love to hear from your suggestions, questions or any specific points you want to mention. Till then stay happy, stay healthy.

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