Oil & Natural Gas Corporation Limited NSE: ONGC was one of the biggest gainers in trade today. The stock was higher by close to 2% on the back of high volumes which is being seen as a bullish signal. The stock was one of the biggest gainers on the NSE Nifty in trade today. Global oil prices have been higher on the back of Russian sanctions and the upcoming OPEC meeting which many believe could see OPEC member countries cutting oil output which would act as a support for oil prices.
The rally on the stock was on the back of oil prices rising to their highest levels since the beginning of the year. The rise in global crude prices were on the back of the US sanctions on Russia and the strong demand picture forecasted by China for its economy in the coming quarters. It is imperative to state that crude prices have rallied by close to 65% from its 12 month lows which is being seen as a huge positive for global oil companies. The weaker dollar is also being seen as an impetus for the rally in global commodity prices. Many analysts on the street believe that the drawdown in US crude inventories would continue to remain supportive for oil prices in the coming weeks which is a huge positive for the company.
On the charts, the stock for Oil & Natural Gas Corporation Limited NSE: ONGC has given a breakout and has moved above both its 200 day and 50 day moving averages which is being seen as a huge positive. The RSI for the stock continues to be in a rising trend which is indicative of the strength of the current up-move and continues to remain below the over-bought zone on the daily charts which is a positive according to analysts on the street. The high volumes and the momentum indicators suggest fresh buying at current levels. Analysts believe the stock could head to levels of Rs.192 if it were able to give a closing above the levels of Rs. 188 in the near term. The stock continues to see support emerge at levels of Rs.181 which is also the 50 day moving average for the stock.
On the options front Oil & Natural Gas Corporation Limited NSE: ONGC continues to see huge open interest buildup at the 200 Call which many believe would be a resistance. On the put side 170 put continues to see highest open interest which is indicative of the strong support at those levels.