07
Jul
11

ONGC continued..

Today ONGC July & August future contract price difference reduced from Rs.7 to 4.5. There was one news report on  CNBC-TV18 that government might announce oil subsidy sharing formula on 11th July. ONGC will subsequently file its red herring prospectus (RHP). It goes without saying that clarity on oil subsidy sharing formula will ensure success of ONGC FPO.

I continue to hold my ONGC 240 puts. Normally I don’t trade in futures but in case ONGC share price falls to 255-260 levels, I will go long in the PSU giant. I feel it would be a compelling long at that price and risk reward ratio being favorable. It should be 20% plus trade from those levels. Lot of negatives and crude price of USD 100 per barrel is factored in ONGC price.

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