Short Cairn India, go long on ONGC: Amit Gupta

Amit Gupta of ICICI Direct told CNBC-TV18, "Oil and Natural Gas Corporation (ONGC) has outperformed the market. We have seen Nifty coming down heavily, but ONGC has remained around Rs 300-320 levels. In the last couple of weeks people have tried to go short in the stock because they felt it will go beyond Rs 300 and lower levels, but that didn't happen. That is why the shorts are stuck up."

He further added, "Towards expiry one may see some kind of a short covering in the stock. Rs 298 was the one and a half year base over which it found support again when it was coming down below Rs 300. That was a good support area from where it has bounced. 50-week moving average is also placed around Rs 298. So the supports are found by ONGC and that is why it is a good buy level for the stock."
"On the other hand, it was a break down for Cairn India below Rs 300. The stock has tried numerous times to move above Rs 295-300, but it failed. So the open interest (OI) levels, which has started climbing, is clearly on the short side and the short traders are making money also. They are going to leave their positions to expire near expiry and that is why the stock may not find any improvement from the current levels. So one can go short in Cairn India and long in ONGC. This particular trade may give some good money near expiry," Gupta said. Also Read: Cairn India to pump $3bn over 3 years to tap Raj oilfields