SubscribeSign In
Indian Oil Corporation Ltd.
  • Overview
  • News
  • Financials
  • Technicals
  • Peers
  • Shareholdings
  • MF
  • F&O
  • Corporate Actions
  • About

Indian Oil Corporation Ltd.

  • 89.901.50 (1.70%)
  • Closed
  • As On: 03 Dec, 2020, 03:59 PM IST
  • Open89.45
  • High90.10
  • Low87.60
  • Prev Close88.40
  • Volume3,93,17,565
  • VWAP(₹)88.96
  • Inventory gains

    The second quarter results of the company were better due to higher inventory gains. But the core gross-refining margin still remains weak. The best operating scenario for the company would be stable oil prices which would not lead to volatile inventory gains or losses.
  • Outlet expansion

    The retail outlets of the company stand at 29,085. It added 994 outlets to its tally in the first half of FY 21. There is scope for improvement in operation of these outlets, both by way of rationalisation and by addition of value-added service
  • Higher capex

    Given the planned expansion of its refineries, the capital expenditure of the company would remain high in the near term, leading to some financial ratios remaining strained.
  • Factor to watch

    Would the divestment of BPCL push up the valuation matrix of state-owned oil companies or would it come under further pressure as shareholder make a switch.

Key Metrics

  • PE Ratio(x)25.82
  • EPS - TTM(₹)3.48
  • MCap(₹ Cr.)84,633.29
  • MCap Rank3
  • PB Ratio(x)0.86
  • Div Yield(%)4.73
  • Face Value(₹)10.00
  • 52W High(₹)129.70
  • 52W Low(₹)71.15
  • MCap/Sales0.15
  • Beta(1 Month)1.33
  • BV/Share(₹)102.27

Returns

  • 1 Day1.7%
  • 1 Month15.26%
  • 3 Months5.64%
  • 1 Year-30.04%
  • 3 Years-53.64%
  • 5 Years-16.48%

Financials

    • Quarterly Topline Performance

      Company witnessed QoQ revenue growth of 35.4%, which is highest in the last 3 years. (Source: Consolidated Financials)
    • Topline Contraction

      Sales de-grew by 8.24%. Company witnessed revenue contraction for the first time in last 3 years. (Source: Consolidated Financials)
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income82,862.4261,198.301,19,255.601,24,408.061,11,577.79
    Total Income Growth (%)35.40-48.68-4.1411.50-15.41
    Total Expenses74,168.8556,882.821,35,076.111,19,207.321,09,729.20
    Total Expenses Growth (%)30.39-57.8913.318.64-12.29
    EBIT8,693.574,315.48-15,820.515,200.741,848.59
    EBIT Growth (%)101.45--404.20181.34-72.84
    PAT6,025.812,350.25-7,782.552,683.87468.04
    PAT Growth (%)156.39--389.97473.43-87.48
    EBIT Margin (%)10.497.05-13.274.181.66
    Net Profit Margin (%)7.273.84-6.532.160.42
    Basic EPS (₹)6.562.43-8.482.920.51
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income87,147.8863,038.791,20,161.341,25,184.941,12,337.73
    Total Income Growth (%)38.24-47.54-4.0111.44-14.99
    Total Expenses78,586.9759,238.871,31,921.061,20,151.091,10,215.00
    Total Expenses Growth (%)32.66-55.109.809.02-12.01
    EBIT8,560.913,799.92-11,759.725,033.852,122.73
    EBIT Growth (%)125.29--333.61137.14-69.18
    PAT6,227.311,910.84-5,185.322,339.02563.42
    PAT Growth (%)225.89--321.69315.15-84.33
    EBIT Margin (%)9.826.03-9.794.021.89
    Net Profit Margin (%)7.153.03-4.321.870.50
    Basic EPS (₹)6.782.08-5.652.550.61
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue4,87,152.555,30,871.784,24,911.703,59,241.203,48,231.23
    Total Revenue Growth (%)-8.2424.9418.283.16-23.25
    Total Expenses4,84,391.015,06,329.263,91,372.633,31,925.463,31,769.23
    Total Expenses Growth (%)-4.3329.3717.910.05-26.00
    Profit after Tax (PAT)-893.1417,376.7022,189.4519,849.4912,022.45
    PAT Growth (%)-105.14-21.6911.7965.10144.76
    Operating Profit Margin (%)1.925.578.868.735.75
    Net Profit Margin (%)-0.183.295.265.583.47
    Basic EPS (₹)-0.9718.4123.4120.9425.37
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Revenue4,89,827.845,30,829.774,27,453.323,64,142.773,49,498.59
    Total Revenue Growth (%)-7.7224.1817.394.19-20.87
    Total Expenses4,82,217.315,05,702.853,94,889.043,37,821.533,34,036.30
    Total Expenses Growth (%)-4.6428.0616.891.13-23.27
    Profit after Tax (PAT)1,313.2316,894.1521,346.1219,106.4011,242.23
    PAT Growth (%)-92.23-20.8611.7269.95113.20
    Operating Profit Margin (%)2.795.578.498.265.34
    Net Profit Margin (%)0.273.205.035.303.23
    Basic EPS (₹)1.4317.8922.5220.1623.72

    All figures in Rs Cr, unless mentioned otherwise

    • Trailing Behind 4-year Average ROA

      Company witnessed ROA of -0.27% in last FY which is lower than its 4-year average ROA of 4.74% along with asset turnover ratio of 146.89. (Source: Consolidated Financials)
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets3,29,736.833,35,155.112,95,672.292,73,561.042,31,555.43
    Total Assets Growth (%)-1.6213.358.0818.14-0.94
    Total Liabilities2,33,462.652,20,808.511,79,647.251,69,560.381,40,149.78
    Total Liabilities Growth (%)5.7322.915.9520.99-14.46
    Total Equity96,274.181,14,346.601,16,025.041,04,000.6691,405.65
    Total Equity Growth (%)-15.80-1.4511.5613.7830.76
    Current Ratio (x)0.680.810.760.730.87
    Total Debt to Equity (x)1.320.820.550.580.54
    Contingent Liabilities47,749.0347,434.9534,284.6532,687.3023,760.11
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Total Assets3,11,090.563,15,707.722,80,739.912,59,213.272,20,504.17
    Total Assets Growth (%)-1.4612.468.3017.550.30
    Total Liabilities2,17,321.692,07,050.211,70,568.891,59,484.551,32,369.86
    Total Liabilities Growth (%)4.9621.396.9520.48-12.85
    Total Equity93,768.871,08,657.511,10,171.0299,728.7288,134.31
    Total Equity Growth (%)-13.70-1.3710.4713.1629.70
    Current Ratio (x)0.690.810.760.720.88
    Total Debt to Equity (x)1.200.770.500.510.48
    Contingent Liabilities48,131.4046,827.5839,238.8044,531.5644,150.49

    All figures in Rs Cr, unless mentioned otherwise

    • Debt Coverage Capability

      Company will take 14.56 years to pay off its debt obligations with latest operating cash flow of Rs 8653.26 cr. (Source: Consolidated Financials)
    • Increase in Cash from Investing

      Company has used Rs 29096.97 cr for investing activities which is an YoY increase of 21.47%. (Source: Consolidated Financials)
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities8,653.2614,133.0429,081.6628,216.1225,624.23
    Net Cash used in Investing Activities-29,096.97-23,954.94-17,118.70-17,684.41-13,610.44
    Net Cash flow from Financing Activities20,945.2310,436.45-11,973.56-10,937.06-11,889.71
    Net Cash Flow501.52614.55-10.60-405.35124.08
    Closing Cash & Cash Equivalent1,434.61933.28318.90329.50734.85
    Closing Cash & Cash Equivalent Growth (%)53.72192.66-3.22-55.16-39.82
    Total Debt/ CFO (x)14.566.562.142.081.88
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities8,639.3613,489.5326,423.8027,799.4222,944.26
    Net Cash used in Investing Activities-26,877.43-21,839.00-15,778.68-14,733.90-12,416.75
    Net Cash flow from Financing Activities18,735.328,334.49-10,644.33-13,274.57-10,367.09
    Net Cash Flow497.25-14.980.79-209.05160.42
    Closing Cash & Cash Equivalent535.5638.5053.6552.86261.91
    Closing Cash & Cash Equivalent Growth (%)1,291.06-28.241.49-79.82134.06
    Total Debt/ CFO (x)13.056.172.101.811.85

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)-0.9315.4519.4819.4413.36
    Return on Capital Employed (%)5.5516.8723.9722.0313.54
    Return on Assets (%)-0.275.187.507.255.19
    Interest Coverage Ratio (x)1.426.029.808.345.75
    Asset Turnover Ratio (x)146.89157.58142.55129.90149.44
    Price to Earnings (x)-84.038.607.549.247.76
    Price to Book (x)0.791.331.471.801.04
    EV/EBITDA (x)10.396.405.136.435.53
    EBITDA Margin (%)3.967.1810.6810.667.40
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)1.4015.5419.3719.1512.75
    Return on Capital Employed (%)8.5918.1424.8622.7313.20
    Return on Assets (%)0.425.357.607.375.09
    Interest Coverage Ratio (x)2.276.8310.448.646.00
    Asset Turnover Ratio (x)156.30167.14151.04138.85157.44
    Price to Earnings (x)57.148.857.839.608.30
    Price to Book (x)0.801.371.521.841.06
    EV/EBITDA (x)8.376.295.176.495.79
    EBITDA Margin (%)4.597.0010.1610.006.73
    • Axle load

      In July/August 2018, the Government had increased the axle load limit for all trucks. This move helped increase the freight capacity of the entire population of trucks in India by 20-25%, equivalent to three years of incremental freight demand, thus negatively impacting HSD demand.

    • Oil production matrix

      Domestic crude oil production during 2019-20 was lower by 5.9% at 32.2 MMT, as the diminishing phase of many fields continued. Crude oil and condensate production by public sector entities decreased by 2.5% while production by private sector entities decreased by 14.5% in 2019-20 as compared to the previous year. However, improvement in production levels is expected in the near future with the Government’s thrust on ramping up domestic production through investment-friendly policies.

    • Volatility in crude oil price - challenges of cash management

      The heightened volatility in crude oil prices in the recent times has also come as a major challenge for the Company. Oil price volatility, exchange rate fluctuation along with lower demand, made cash management challenging, affected the working capital cycles, and led to short-term debt build-up.

Technicals

  • MACD Crossover

    Bullish signal on daily chart

    Appeared on: 2 Dec 2020

    Region: Positive

    Last Signal 7 Oct 2020 (Gain 3.06%)

    Average price gain of 4.13% within 10 days of Bullish signal in last 10 years

    5 Day EMA Crossover

    Bullish signal on daily chart

    Appeared on: 1 Dec 2020

    5D EMA: 85.49

    Last Signal 23 Nov 2020 (Gain 1.04%)

    Average price gain of 2.62% within 7 days of Bullish signal in last 5 years

    10 Day EMA Crossover

    Bullish signal on daily chart

    Appeared on: 1 Dec 2020

    10D EMA: 85.16

    Last Signal 21 Oct 2020 (Gain 4.28%)

    Average price gain of 2.44% within 7 days of Bullish signal in last 5 years

  • 43%
    Positive Movement
    since 1st Jan 2005
    on basis
    57%
    Negative Movement
    since 1st Jan 2005
    on basis
    Exclude

    Global Meltdown1st Jan 2008 to 10th Nov 2008

    Covid Crisis1st Feb 2020 to 31st Mar 2020

  • R190.80Pivot

    89.20

    S188.30
    R291.70S286.70
    R394.20S384.20
  • 5 Days14 Days28 Days
    2.352.172.20

Peers

    • CHART
    • TABLE
    • 1D
    • 1W
    • 1M
    • 3M
    • 6M
    • 1Y
    • 5Y
  • NAMEP/E (x)P/B (x)ROE %ROCE %ROA %Rev CAGR [3Yr]OPMNPMBasic EPSCurrent RatioTotal Debt/ Equity (x)Total Debt/ CFO (x)
    Indian Oil Corp25.820.79-0.935.55-0.2710.571.92-0.66-0.970.681.3214.56
    BPCL20.211.708.366.832.0212.032.170.7915.530.721.697.73
    HPCL5.390.948.516.632.2512.621.471.1517.320.661.277.20
    Add More
    Annual Ratios (%)

    Choose from Peers

      Choose from Stocks

      Shareholding Patterns

      • Category30 Sep 202030 Jun 202031 Mar 202031 Dec 2019
        Promoters51.5051.5051.5051.50
        Pledge0.000.000.000.00
        FII6.076.337.197.64
        DII13.3713.8613.4013.80
        Mutual Funds5.746.516.066.47
        Others29.0628.3127.9127.06
      • CategoryNo. of SharesPercentage% Change QoQ
        Promoters4,84,81,33,17851.50 %0.00
        Pledge00.00 %0.00
        FII57,16,62,6886.07 %-0.26
        DII1,25,80,63,27313.37 %-0.49
        MF54,01,97,0775.74 %-0.77
        Others2,73,62,99,78329.06 %0.75

      Mutual Funds Ownership

      MF Ownership as on 31 October 2020

      Futures & Options

        • Expiry Month
        DatePrice

        27-09-2020Current

        90.501.90 (2.14%)

        89.10
        Open
        90.70
        High
        87.95
        Low
        88.60
        Prev Close
        7,683
        Contracts Traded
        39,198.63
        Turnover (₹ Lakhs)
        • Type
        • Expiry Month
        • Strike Price
        DatePrice

        27-09-2020Current

        0.00-18.25 (-100.00%)

        0.00
        Open
        0.00
        High
        0.00
        Low
        18.25
        Close
        0
        Contracts Traded
        0.00
        Turnover (₹ Lakhs)

      Corporate Actions

      • Board Meeting

        Quarterly Results

        Oct 07, 2020

        General Meeting

        -

        Aug 27, 2020

        Board Meeting

        Quarterly Results

        Jul 15, 2020

      • Announced onMeeting on
        Oct 07, 2020Oct 30, 2020
        Quarterly Results
        Jul 15, 2020Jul 31, 2020
        Quarterly Results
        Jun 19, 2020Jun 24, 2020
        Audited Results
        Mar 05, 2020Mar 13, 2020
        Interim Dividend
        Mar 05, 2020Mar 06, 2020
        Interim Dividend
      • Announced onEx-DateDividend%
        May 22, 2018Aug 20, 201820%
        Dec 13, 2018Dec 21, 201867%
        Mar 13, 2019Mar 27, 20190%
        May 17, 2019Aug 21, 201910%
        Mar 13, 2020Mar 23, 202042%
      • Announced onEx-Date
        Aug 29, 2016Oct 18, 2016
        Bonus Ratio: 1 share(s) for every 1 shares held
        Sep 13, 2009Oct 29, 2009
        Bonus Ratio: 1 share(s) for every 1 shares held
        Jun 06, 2003Aug 14, 2003
        Bonus Ratio: 1 share(s) for every 2 shares held
        Jun 17, 1999Sep 20, 1999
        Bonus Ratio: 1 share(s) for every 1 shares held
        Sep 12, 1994-
        Bonus Ratio: 2 share(s) for every 1 shares held
      • No Data Available

      • No Data Available

      • Announced onMeeting on
        Aug 27, 2020Sep 21, 2020
        -
        Jul 29, 2019Aug 28, 2019
        Book closure from Aug 23, 2019 to Aug 28, 2019
        Aug 01, 2018Aug 29, 2018
        Book closure from Aug 23, 2018 to Aug 29, 2018
        Jul 29, 2019-
        Book closure from Aug 23, 2019 to Aug 28, 2019
        Jul 29, 2019-
        Book closure from Aug 23, 2019 to Aug 28, 2019

      About

      Indian Oil Corporation Ltd., incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 84633.29 Crore) operating in Gas & Petroleum sector.

      Indian Oil Corporation Ltd. key Products/Revenue Segments include Petroleum Refinery Products which contributed Rs 573843.13 Crore to Sales Value (98.86 % of Total Sales), Other Operating Revenue which contributed Rs 4648.36 Crore to Sales Value (0.80 % of Total Sales), Grants which contributed Rs 1296.17 Crore to Sales Value (0.22 % of Total Sales), Scrap which contributed Rs 213.62 Crore to Sales Value (0.03 % of Total Sales), Subsidy which contributed Rs 161.68 Crore to Sales Value (0.02 % of Total Sales), Sale of services which contributed Rs 152.55 Crore to Sales Value (0.02 % of Total Sales) and Income From Sale Of Share & Securities which contributed Rs 100.20 Crore to Sales Value (0.01 % of Total Sales)for the year ending 31-Mar-2020.

      For the quarter ended 30-09-2020, the company has reported a Consolidated sales of Rs 81704.43 Crore, up 34.98 % from last quarter Sales of Rs 60528.68 Crore and down -26.48 % from last year same quarter Sales of Rs 111128.70 Crore Company has reported net profit after tax of Rs 6032.38 Crore in latest quarter.

      The company’s top management includes Dr.Jagdish Kishwan, Mrs.Indrani Kaushal, Mr.Vinoo Mathur, Mr.Shrikant Madhav Vaidya, Mr.Shankar Chakraborti, Mr.Sanjiv Singh, Mr.Sandeep Kumar Gupta, Mr.Samirendra Chatterjee, Mr.Ranjan Kumar Mohapatra, Mr.Gurmeet Singh, Mr.G K Satish, Mr.D S Shekhawat, Mr.Chitta Ranjan Biswal, Mr.Ashish Chatterjee, Mr.Akshay Kumar Singh, Dr.S S V Ramakumar, Ms.Lata Usendi. Company has G S Mathur & Co. as its auditors. As on 30-09-2020, the company has a total of 9,414,158,922 shares outstanding.

      About Indian Oil Corp

      Indian Oil Corporation Ltd., incorporated in the year 1959, is a Large Cap company (having a market cap of Rs 84633.29 Crore) operating in Gas & Petroleum sector. Show More

      Key Indices Listed On

      Nifty 50, Nifty 100, Nifty 200, Nifty 500, S&P BSE 500

      Address

      Indian Oil Bhavan,G-9, Ali Yavar Jung Marg,Bandra (East),Mumbai, Maharashtra - 400051

      Executive Leadership

      AK

      Akshay Kumar Singh

      Director
      AK

      Alok Khanna

      Executive Director
      AB

      Archna Bhardwaj

      Executive Director
      AC

      Ashish Chatterjee

      Government Nominee Director
      Show More

      Auditors

      Singhi & Co.
      G S Mathur & Co.
      V Singhi & Associates
      K C Mehta & Co

      Indian Oil Corp Share Price Update

      Indian Oil Corporation Ltd. share price moved up by 1.70% from its previous close of Rs 88.40. Indian Oil Corporation Ltd. stock last traded price is 89.90

      Share PriceValue
      Today/Current/Last89.90
      Previous Day88.40

      DATA SOURCES: TickerPlant (for live BSE/NSE quotes service) and Dion Global Solutions Ltd. (for corporate data, historical price & volume, F&O data). Sensex & BSE Quotes and Nifty & NSE Quotes are real-time and licensed from BSE and NSE respectively. All timestamps are reflected in IST (Indian Standard Time).

      DISCLAIMER: Any and all content on this website including tools/analysis is provided to you only for convenience and on an “as-is, as- available” basis without representation and warranties of any kind. The content and any output of such tools/analysis is for informational purposes only and should not be relied upon or construed as an investment advice or guarantee for any specific performance/returns advice or considered as recommendation for the purchase or sale of any security or investment. You are advised to exercise caution, discretion and independent judgment with regards to the same and seek advice from professionals and certified experts before taking any decisions.

      By using this site, you agree to the Terms of Service and Privacy Policy.

      Markets Data

      *

      Key Metrics

      • This is a ratio arrived at by dividing the current market price of a stock by its latest (annual or annualized) earnings per share. Here we have taken the TTM (trailing twelve months) adjusted earnings per share.

      • Earnings per share (TTM) tells the profit after tax earned on a per share basis by a stock over the last twelve months or four quarters.

      • MCap or Market capitalization of a stock is calculated by multiplying the total number of shares outstanding of that particular stock with its current market price.

      • This is the ranking of a company within its sector based on MCap or Market capitalization. Higher the market capitalization of a company, higher the rank it is assigned.

      • Price to Book represents the ratio of current market price of a stock to its book value per share. The book value itself is arrived at by dividing the net worth of a company by the total number of shares outstanding of the company at that time.

      • Dividend Yield calculates the amount of full year dividend declared by a company as a percentage of the current market price of a stock. All other things being equal, higher the dividend yield of the stock, the better it is for investors.

      • Face value of a stock is the value ascribed to the stock as per the balance sheet of the company. The dividend declared by a company is usually declared as a percentage of face value.

      • Beta (β) is a measure of systematic risk. It describes the responsiveness of a stock to fluctuations in the market. Beta coefficient of more than 1 denotes that a security is more volatile than its benchmark and less than 0 signifies that security return is not correlated to market movement.

      • Volume Weighted Average Price represents the average price of a security over a particular time period (example one trading day) weighted by the volume traded at each price point.

      • This represents the 52 week high and low price of the security. It is also the 1 year high and low of the security. This represents the highest and lowest price touched by the security during the past 52 weeks or 1 year including today.

      • Book value represents the value arrived at by subtracting the total liabilities from the total assets of the company. On dividing this value with the total number of shares outstanding for the company, we can arrive at book value per share. Book value is also known as Net Asset Value of a company.

      • This is a ratio of market capitalisation of a company’s stock to its annual sales. The market capitalization here is taken for the fully paid-up equity share of the company.

      Technicals

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

        Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      • Pivot points are indicative support and resistance levels which are calculated on basis of previous day’s high, low and closing prices. Pivot level for Monday’s trade would be based on Friday’s prices and Monday’s, high, low and close price would go into calculation of pivot levels for Tuesday’s trading session.

        There are two underlying assumptions in pivot points. First, the specific price level indicated by R1, R2 and R3 may act as a barrier or resistance in an uptrend. So, if a stock moves up above these pivots levels, the uptrend gets confirmed. Second these specific price levels may see an increased activity, hence may be used as levels to book profit by traders with a long positions. For traders with short position, these points are often helpful in determining what should be the stop loss for a trade.

        Similarly, in case of support levels as indicated by S1, S2 and S3, they may act as price level where a stock might get a breather when it is slipping southward. In case these supports levels are broken it is a confirmation of a down trend. The stock may also see increased activity close to pivot levels. They may be used by trader may use them to put stop loss for a long trade. If a trader has short position, the pivot level may help in determine a level, where profit may be booked.

        Like any other technical indicator, pivots levels cannot and should not be used as single factor while taking a trading decision. They should be combined with other technical indicators. It could be short term moving averages, stochastic, moving average convergence divergence (MACD) or overbought level as indicated by relative strength index (RSI). For example, if a breakdown of support level (S1, S2 or S3) is accompanied with stock price also moving below its short term moving average or stochastic on daily charts giving a sell signal, it would add to weightage to the decision of taking a short trade.