The outlook for Oil and Natural Gas (ONGC) has turned positive. The bullish outlook will not change as long as the stock rules above ₹155. Immediate support is at ₹175 and the next one is at ₹167.50. ONGC finds an immediate resistance at ₹197.30 and the crucial one at ₹239. The close above the latter will change the long-term outlook also positive. In that event, the stock has the potential to create a new high. We expect the current trend to continue for quite some time.

F&O pointers: ONGC September futures closed at ₹184.60 and the October futures at ₹185.80 against the spot price of ₹184.45. This signals marginal existence of long positions. Option trading indicates that ONGC could move in a range of ₹ 175-190, where respective put and calls saw accumulation of open interests.

Strategy: We advise traders consider a plain-vanilla call strategy. Traders can consider buying 185-call, which closed at a premium of ₹2.55. As the market lot is 3,850 shares per slot, this would cost ₹9,817.50, which will be the maximum loss one could suffer.

The maximum loss will happen if ONGC fails to cross ₹185. On the other hand, profit potentials are high if the stock surges sharply in this series.

A close above ₹187.55 will turn the position positive. We advise traders hold the position till expiry week. Traders can exit the position if the position makes a profit of ₹4,500.

Follow-up: Last week recommended buying 850-call on SBI cards. The position is marginally innegative. As advised, investors can hold the position for for one more week and can be reviewed later.