Indian Oil Corporation is poised for a downward breakthrough of its key support at ₹322. Investors with a short-term perspective can consider selling the stock at current levels. After an intermediate-term uptrend from the January 2014 low of ₹194.5, the stock encountered significant resistance in the band between ₹375 and ₹385 in late May and early June. The stock subsequently changed direction. Since then, the stock has been on a short-term downtrend, forming a descending triangle pattern. The daily volumes have been seeing a decreasing trend since early June, backing the downtrend. Both the daily and weekly price rate of change indicators are featuring in the negative terrain, implying selling interest. Further, the daily moving average convergence divergence indicator is hovering in the negative territory, indicating bearish momentum. Our short-term outlook on the stock is bearish. A decline below the immediate support will pave the way for a downmove to ₹311 and then ₹304 in the short term. Sell the stock with a stop-loss at ₹331.

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

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