IOC Short Trade Idea - New / Add to

IOC is a current short equity position, I think it's in a pretty good area to either start a new position or add to an existing one.

 IOC 5-day chart with a Head and Shoulders top from 2012 to present, we seem to be at the top of the right shoulder which would be a fairly low risk, quality entry.

 Daily IOC H&S with Left Shoulder/Head/Right Shoulder and the neckline which is slanting.

 H&S patterns ALWAYS need to be confirmed by volume analysis, this may be one of the most mistaken pattern in Technical Analysis, few people understand confirming a H&S with volume. As you can see, this is pretty good, not perfect, but close enough. Volume initially rises on the formation of the left side of the left shoulder , then volume starts to confirm as it rises with a fall back to the neckline on the right side of the left shoulder. The volume declines during the rally to start the head and volume declines on the pullback on the right side of the head, this is where volume really needs to be right. The rally to start the right shoulder sees advancing volume which is not what we want to see, but then it starts to decline near the top so all in all it's close enough.

 This is the right side of the pattern on a daily chart with Bollinger Bands, the price pattern form a sort of bull pennant so I want to watch for a head fake false breakout to the upside, that would be the best place

 Again, the custom DeMark inspired indicator (that still needs a name-suggestions?) with buy and sell signals on a 7-day chart. Note the sell signal during the Head portion of the recent H&S  pattern.

 On a daily MoneyStream chart, the divergence is clear by 2011, through 2012 and 2013 it just gets worse as it devolves in to a deeper leading negative divergence.

 On a 2-day chart of Don Worden's Money Stream, a 2006 positive divergence  can be seen, through 2008 and 2009 a weaker, but still positive divergence (as you might expect considering the dates), 2010 the negative divergence at a small sort of double top begins . Again through 2010-2013 it just gets worse.

 The 3-day 3C chart shows an early 2009 positive divergence, confirmation through the year, by 2010 the chart is clearly leading negative and devolves from there.

 A close up of the right side of the 3-day chart shows the divergence at the H&S top discussed above.

 An hourly chart shows the same pattern.

 This 30 min chart shows the negative divergence at the right shoulder of the pattern.

Although we were able to short IoC at higher levels (around the head area at $76, the top of the right shoulder is the last area I would consider to hold advantage until the neck line is broken and a bounce back above the neck line is complete.

 The 15 min Right shoulder of IOC shows more clearly a fractal pattern of another H&S that makes up the right shoulder of the pattern.

 The faster charts show more detail, this 5 min chart clearly shows the head area going leading negative. This makes this area a high probability area to enter IOC short or at any level above this.

A 3 min chart shows one of the best entries as a head fake in yellow, any such head fake move again would make for an excellent entry, but I would consider IOC a short here. I would consider the $78 area a possible add to area and as such it would be part of my risk management, allowing a stop wide enough and enough room to add to IOC at similar levels, IOC can still be added to down to about $67.50 if the chance to add to the short at better prices doesn't materialize.

I'd consider IOC to be a high probability, low risk short entry in this area.

The potential long term target in IOC is startling. Looking at the longer term H&S...

Gives us a 40 point top pattern ($50-$90) which gives us a $10 pattern implied target. Even at $20 that still makes IOC well worth the effort.