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We recommend a buy in Indian Oil Corporation (IOC) at current levels. From the weekly chart of IOC, we see that it has been moving sideways in a broad range of Rs 390 and Rs 515 since December 2006. It is evident from the daily chart that the stock’s recent decline from the upper boundary of the sideway consolidation found support at Rs 420, which coincides with 61 per cent fibonacci retracement level of prior uptrend.

The stock has been on a short term uptrend from October trough of Rs 420 levels. IOC penetrated the 21-day moving average in the last week and is currently facing resistance at Rs 515 levels. The daily momentum indicators are bullish. Immediate support for the stock is at Rs 460 and the subsequent support level is at Rs 420. Short-term investors can buy the stock with stop loss at Rs 465. We expect the stock to break through the upper boundary of the broad sideways consolidation and move up to Rs 560 in the short-term, with a minor pause around Rs 520.

Yoganand D.

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