ONGC!!!

ONGC is one of my favorite stocks. This is the only stock I sometimes trade in futures other than Nifty. This is also one of the heavy weights, more often it has cushioned Nifty’s fall but lately it seems to be contributing to it! Well the stock is good unfortunately it is the PSU that the government likes to milk!

Let us look at the chart above;

On the right side we have the weekly chart. It has broken the multi year channel (dashed red lines). It also shows a bearish H&S on the weekly chart and looks about just hanging near the neckline.

On the left is the daily chart. Here one can see that ONGC is rising from the lower channel and trying to get back into the value area (the ema’s). It faces strong resistance at the 940/950 levels. But to reach there it needs to clear 875/880 convincingly!

The reason for 875/80 is because that looks like the short term target on the hourly charts shown below (here also you can see short term positive divergence). Now if you take a look at he chart below on the right side it has ONGC (green line) vis a vis NIFTY (red line) and the RS line (blue) plotted in the bottom. The RS line suggests a temporary sign of strength.

I have entered it at 807 with a target of 870. If tomorrow it manages to close above 850, I will be moving my stop there.