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Published on 29/10/2020 12:08:10 PM | Source: ICICI Direct

Derivatives Strategy – Positional Future Buy Mahanagar Gas Ltd For Target Of Rs. 900 - ICICI Direct

Posted in Broking Firm Views - Short Term Report| #Mahanagar Gas Ltd #Oil and Gas Sector #Trading Report #ICICI Direct

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Derivatives Strategy – Positional Future

* In the current leg of the rally from 11600, most of the beaten down stocks did well and saw decent pullbacks. Stocks from the oil & gas universe were no exception with IGL and MGL reverting sharply

* However, IGL comparatively outperformed whereas MGL has been consolidating above | 800 levels for a couple of sessions. We feel a pickup in domestic gas demand and CNG due to Unlock 5 would act as a sentimental booster

* MGL is one stock that saw huge addition of short positions in the October series. The stock fell from | 880 levels and moved below | 800 levels in October. The recent closure in short OI along with price hike from the bottom is indicating some sign of a reversal

* For the November series, fresh long OI blocks are seen. We feel MGL is well placed to retest its last month’s high and can move towards | 900 levels

* The IV-spread of MGL-Nifty is hovering near its mean levels as the stock is consolidating. As fresh long positions were seen for the November series, we feel closure in Call writing positions will pull the stock higher

 

Positional Future: Buy Mahanagar Gas November futures at Rs. 840-844, Target: Rs. 900, Stop loss: Rs. 805, Time frame: Till November expiry

 

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