Crude oil has cracked big time in international market. The EGOM meeting is scheduled today, which again could have implications for ONGC and other oil marketing companies.
Let’s take a look at ONGC, which is one of the index heavyweight and probably a big beneficiary if the government decides to act.
From the daily chart, it is apparent that the buyers are stacked up at the Rs.240-250 range. The “key reversal day” pattern, formed a couple of days ago, right at this crucial support level, is a bullish sign.
Let the stock get past minor resistance at Rs.274. Long positions may be considered on a subsequent fall, for a target of Rs.303. Stop loss for long positions should be placed at Rs.244.
While there is a strong possiblity of a rally to Rs.303, I still do not have a very compelling trading plan to participate in this potential upward move.
We however need to close above the major swing high at Rs.326, to indicate reversal of the recent downward correction.
Watch this space for updates.