Sell above 123.50

IOB (SELL, below Rs123.50, Target Rs117): On Friday, the stock has signaled a fresh sell signal due to formation of ‘Engulfing Bearish Line’ pattern on candlesticks. The stock had been on a strong support around its 200-DMA since third week of January 2011, which broke down on Friday, confirming the downside. Last week, we the stock broke below its 200-day DMA. Friday’s decline confirms the breakdown from the multiple support zone. Furthermore, on the weekly chart, it has broken down from a small consolidation pattern, confirming the negative trend. We expect the selling pressure to continue, which could drag the stock back towards the levels of Rs114-112. We recommend traders to sell IOB February Futs below Rs123.50 with stop loss of Rs126 for target of Rs117.