Technical Analysis

Stock query: IOC trending downwards

Yoganand D | Updated on October 18, 2020 Published on October 18, 2020

A decisive move above ₹95 can bring back bullish momentum

Here are the answers to readers’ queries on the performance of their stock holdings.

I have been holding the stock of IOC for a long time. Kindly share your view.

Narasingh Mohanty

Indian Oil Corporation (₹74.2): The stock of Indian Oil Corporation (IOC) has been on a long-term downtrend since recording a multi-year high at ₹231 in August 2017.

Both the medium- as well as the short-term trends are also down for the stock.

It recorded a 52-week low at ₹71.1 in late May this year and witnessed a corrective rally. However, the stock met with a key barrier at around ₹95 in late July and resumed the downtrend.

Since then, it has been on a short-term downtrend.

For the past three weeks, the stock has been on a sideways move in a narrow band between ₹73 and ₹77. It is hovering just above the key medium-term base level of ₹71.

An emphatic plunge below this support can pull the stock down to ₹65 and then to ₹60 over the short to medium term.

On the upside, a decisive move above the key resistance level of ₹95 can bring back bullish momentum and take the stock northwards to ₹100. A further breakthrough of ₹100 can push the stock higher to ₹110 and then to the ₹120-₹125 zone over the medium term.

What are the prospects for the stocks of GMR Infrastructure and Prakash Industries?

Pradeep Kabra

GMR Infrastructure (₹23.7): Since taking support at around ₹14 in early March this year, the stock had been on an intermediate-term uptrend.

But a vital resistance at ₹28 limited the stock’s rally in late August. A corrective decline has been in place since then. A decline below the immediate support level of ₹22 can pull the stock lower to ₹20.

An emphatic plunge below the key support level of ₹20 will alter the intermediate-term downtrend and pull the stock down to ₹18 and then to ₹16 over the medium term. An emphatic breakthrough of the immediate resistances at ₹26 and ₹28 will strengthen the uptrend and take the stock northwards to ₹30 and then to ₹35 over the long run.

Prakash Industries (₹44.5): Last week, the stock gained 13.4 per cent with good volume. It has rebounded from a key base level of ₹40. Since a March low of ₹18.5, it has been on an intermediate-term uptrend.

A break above ₹50 is needed to reinforce the uptrend and take the stock higher to ₹600 over the medium term. A key support at ₹40 can cushion the stock, but a strong decline below this base can pull the stock down to ₹36 and then to ₹30.

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Published on October 18, 2020
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