ONGC share gained 7% this week as Brent crude oil is above $55 per barrel. This happened after Saudi Arabia decided to cut production by one million barrels per day and resulted into reduction of oil supply in this low demand environment. This fueled a rally in oil market and pushes the oil prices above $ 55/ barrel, a good news for Upstream companies like ONGC. The company is involved in oil extraction both onshore and offshore. Any upside in oil prices leads to addition in the topline of the company because they can secure a better price from selling crude oil to different companies both domestically and internationally.
We are of the opinion that stock can provide a handsome return in long run and even if it falls good for average. The stock has fallen a lot and is trading at multi year low. This can be a value buy at reasonable rate and in coming time stock can see good upside. Apart from capital gain investors can expect good dividend from the company.
Even for short term traders, stock can be entered with a stop loss of Rs 84 and look for target at Rs 110 to Rs 115 in near future. We suggest you add 50% now and incase stock falls add 50% at lower level.