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We recommend a sell in the stock of Indian Overseas Bank from a short-term perspective. It is evident from the charts the stock has been on an intermediate-term uptrend from its March low of Rs 37. After taking support at Rs 80 in August, the stock resumed its uptrend move. Subsequently, the stock’s uptrend accelerated but with decreasing volume. It encountered resistance at Rs 141 early this week and began to decline triggered by negative divergence displayed in the daily relative strength index (RSI) and weekly RSI reaching the overbought region. On October 21, the stock declined 3 per cent, with very low volume. The daily moving average convergence and divergence indicator (MACD) has signalled a sell. Both daily and weekly RSI are correcting from the overbought territory. We take a contrarian view on the stock and we are bearish from a short-term perspective. We expect the stock to decline until it hits our price target of Rs 120. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 139.

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