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Outlook for Oil and Natural Gas Corporation (₹170) is negative. If the stock dips below ₹165, it could reach ₹157. Resistances are at ₹181 and ₹190. Only a close above ₹205 will change short-term outlook positive.
F&O pointers: Increase in open interests along the price fall, signals build up of short positions. However, the emergence of put writers in ₹170-strike, signals that the stock may face strong support at around current levels. Trading in call options indicates that ONGC could face strong resistance at ₹180.
Strategy: Traders could consider buying ₹167.50-strike put. It closed with a premium of ₹1.90. As the market lot is 3,750 shares, one has to fork out ₹7,125. The maximum loss would be the premium paid (₹7,125) if the stock closes at or above ₹170.
On the other hand The break-even point is ₹165.6. Exit if the put premium rises to ₹5 or dips to ₹0.4.
Follow-up: Stop-loss would have triggered in HDIL as the stock fell sharply last weekfor both the option and futures strategies.
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