IOB: Can This Deliver Surprise Returns ?

 Hello all, 

Herein I share my observation on IOB. Many of the market participants may not be willing to read this further on the name of the counter itself :) But I give importance to price performance & found this worth spending time on analysis, keeping risk-reward in mind.

Monthly Ichimoku:

Price broke below Kumo cloud during 2011 and remained below the same since then. It's the first time in the decade, the price is entering Kumo Cloud, challenging downtrend, along with Tenkan crossing Kijun upside. This has generated the first ray of hope in the darkness. 

Weekly 200 EMA:

200 week's exponential moving average is served as a decent resistance during the entire decade. The price crossed above moving average once during mid of 2014, but failed to sustain above the same. It's one more attempt after 7 years again. Well, whether it will sustain or not is anyone's guess, though worth keeping in mind. 

Weekly Ichimoku:

After 2 unsuccessful attempts since mid of 2017, it's the First time that prices have sustained above the cloud and have decently consolidated. Future cloud is turned bullish along with Tenkan - Kijun crossover and Chikou Span in open space. All screaming trend reversal from bearish to bullish. 

Weekly RSI:

RSI entered overbought zone first time in 2002 and stock ended up delivering 600% returns. Similarly, 3 times RSI entered overbought zone and counter delivered 100% returns. Well, counter has doubled from the low by now, BUT the RSI has not given up like the recent 3 events which are highlighted. So can this time it can deliver more? Well, it's worth remembering point. 

Weekly ADX:

Trending ADX shows the emerging trend. Not speaking much on DMI behavior. Strength picked up during 2007 - 2011 and stock delivered more than 400%. Similar strength is picking up and still not giving up. Again, a point worth noting ...

Daily Chart Price Action:

Massive curve formation since 2018 is coming to an end with a small curve within the bigger one. The end of the curve is been supported with the highest ever recorded volumes. On curve (so-called cup and handle) breakout, the price can confirm the end of consolidation and beginning of an uptrend. 

Fibonacci Extension:

Fibonacci numbers have great importance even in Elliott waves to gauge the extent of correction and potential targets. 3 levels are given importance, 161.8%, 261.8% and 423.6%. These extensions are applied on higher top higher bottom confirmation. Looking at recent price action, it makes sense to apply the extension tool and stay optimistic. 

Putting it all together:

After studying the monthly and the weekly Ichimoku set up, RSI, ADX, 200 Week's Exponential Moving Average & price action on the weekly and the daily chart, I feel IOB is offering the best risk-reward setup with all favorable price actions. 

Cheers,

Kunal

Follow me on Twitter @RambhiaKunal for regular updates

Statutory Disclosure:

Kindly note that this update is only for educational purpose. It is safe to assume that my personal position, my fund's position, and my client's, as well as relative's position, maybe open in the counter. Prefer to take the advice of your financial advisor before initiating any position. Prefer to keep the risk-reward ratio in mind, give importance to personal temperament, risk appetite, and financial background.