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We recommend a sell in Indian Oil Corporation from a short-term trading perspective. It is evident from the charts of Indian Oil Corporation that it was on an intermediate-term up trend from late October 2008 to mid February 2009 (from Rs 299 to Rs 466). During this uptrend, the stock almost gained 56 per cent. However, it encountered significant resistance at around Rs 450. The stock formed a shooting star candlestick pattern, a bearish reversal pattern near this resistance level. Subsequently, the stock reversed direction and has been on a short-term downtrend. While trending down, the stock conclusively breached its up trendline and 50-day moving average. On March 9, the stock tumbled by 6 per cent, with good volume reinforcing the downtrend. The daily relative strength index is featuring in the bearish zone and the daily moving average convergence and divergence has entered into the negative territory. We are bearish on the stock from a short-term perspective. We anticipate it to decline further until it hits our price target of Rs 370 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 423.

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