The long-term outlook for Oil and Natural Gas Corporation (₹215) is negative. However, the short-term outlook turned positive. The stock finds resistances at ₹242 and ₹277. However, the long-term outlook will turn positive only if ONGC closes above ₹343. Immediate support is at ₹201 and a conclusive close below this level will change the outlook.
F&O pointers: The ONGC futures witnessed a rollover of just about 12 per cent to next month series. Despite the recent sharp gains in the underlying price, futures witnessed just a modest accumulation in open interest, signalling investors are still cautious. Trading in option indicates that the stock could rise to ₹220.
Strategy: Traders can consider rolling over the long positions for a few more series. Traders can rollover the positions for a target of ₹242 or ₹277, based on the individual’s risk profile. An initial stop-loss can be placed at ₹201 and may be shifted to ₹220 if the underlying stock manages to close above ₹242 with high volumes.
Traders can also consider buying ₹220-May-call that closed at ₹6.95. As the market lot is 2,000 shares, the maximum loss could be ₹13,900. But, profit is unlimited if ONGC moves above ₹227 in May expiry. Stop-loss can be placed at ₹2.75/contract.
Follow-up: Traders can consider booking profits on RCom strategy.
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