How ONGC Short Trades Have Paid Off ??

ONGC has been in a downtrend for a while now, giving excellent opportunity to trade short.

Traders could have been rewarded handsomely had they traded short as  follows:

Trade 1 :  Short @ 450 cover @ 400.
                Profit : Rs.50 x 500 (lot size) = Rs. 25,000 per lot

Trade 2 : Short @ 405, cover @ 350
              Profit  : Rs. 55x 500=  Rs. 27,500 per lot

Trade 3 : Short @ 350, cover @   ?? (position open) Current Price : 309
               Profit  : Rs. 41 x 500 = Rs. 20,500 per lot (position still open)
Position close @305. Profit : Rs.45x500 = Rs. 22,500 per lot.

CNXENERGY : Poised for Big Upmove ???

CNXENERGY has formed  an inverse H&S and may be poised for a big up move with a target of  10,400.






With the gas pricing decision round the corner, Reliance, ONGC and Oil India  could be the big beneficiaries. ONGC has conveyed to the government that it needs a price of $6-7 per unit to make its plan for producing gas from new and ageing fields in the next few years viable.

Gas price hike will benefit ONGC, Oil India   more as they produce more than 70 percent of India’s gas requirement.

Star Performers Drag the Market

Reliance and ONGC, the star performers a few weeks back continue to drag the Nifty ever since the gas price hike was deferred. The stocks had risen in the hope of windfall gains in the event the gas price hike was implemented, However, with the NDA government deferring the issue the stocks have slipped and continue to under perform the Nifty.

The spate of bad news continue unabated, especially for Reliance, with the government imposing a further fine of $ 579 mn or Rs. 3,474 crores for failing to meet the gas production target for the year 2013-14 from its Andhra offshore fields. Thus the total penalty for reliance for the period beginning April 1, 2010 would be $2.37 bn or Rs. 14,200 crores. Though the company is likely to contest the penalty, the news has dampened the investor sentiments in the stock.

The technical charts of Reliance and ONGC  have shown identical trend pattern in all time frames i.e. hourly-daily- weekly and the weakness is likely to continue for sometime which may keep Nifty subdued in near term.

Nifty Stars Shining

ONGC and Reliance, the two stocks identified by us earlier, sparkled today  to propel  Nifty above 7500 levels.

We had in our  earlier post   Future Stars of Nifty  dated 29th May, predicted the move by the two index heavyweights, which would take Nifty to higher levels.

ONGC  moved  from  Rs. 381   to Rs. 457 ( up Rs. 76 or 19.95%)  and   Reliance from Rs. 1076  to  Rs. 1130 (up Rs. 54 or 5%) between 29th May and today as TTO rightly anticipated  their bullish moves well in advance. Nifty has moved from 7246 to 7525 (up 279 points or 3.85%) in the 5 trading sessions.

The following hourly charts of ONGC and Reliance show the bullish strength of the two stocks.

Nifty has broken out of the consolidation range of 7200-7500 and if it manages to sustain and close above 7500, now has a target of 7760-7800 in the near term.

Future Stars of Nifty

Nifty has entered consolidation zone with a range of 7200-7500. Heavy profit booking was seen at 7500 on past two occasions and the level will offer stiff resistance. The downside however should be limited as correction in a bull market is normally a sideways consolidation.

Nifty heavyweights Reliance and ONGC have encouraging charts as the trends  make a bullish alignment pattern  on the daily charts with the long term trends showing strong bullish strength. The current sideways move in both the stocks is a brief pause before they start their upward journey and propel Nifty to higher levels.