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ONGC recorded a feeble rally last week and is currently pausing just below its 50-day moving average. A descending triangle formation is apparent in the daily chart that is a bearish pattern.

Resistances for the week would be at Rs 714 and then Rs 740. Failure to clear the first resistance will drag the stock lower to Rs 627 or Rs 585.

We continue with the negative medium-term view for ONGC and our medium-term target is Rs 600.

But buyers are expected to emerge as the stock nears the support band between Rs 550 and Rs 600. One phase of the long-term down move from November 2007 peak could be nearing completion.

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