ICICIdirect recommends buying Petronet LNG in the range of Rs 165-168 for target of Rs 195 with stop loss of Rs 151.50 on a closing basis for three months.
Commenting on the rationale, the stock broker said, "Stocks from the oil & gas space are witnessing accumulation at every decline. After a sharp outperformance from heavyweights like ONGC and Gail, midcap stocks from the sector are also witnessing buying momentum. Petronet LNG has witnessed sustained buying recently. We expect the stock to test Rs 195 levels surpassing its life-time highs placed near Rs 185.
Since February 2014, Petronet LNG has shown a steady move along with continuous rise in open interest. Recently, the stock witnessed exponential gains in open interest. It has risen almost 150% in the last month with the price move clearly indicating accumulation of long positions in the stock.
The stock had witnessed three-month high volumes on June 13 at the price of Rs 168. Since then, it remained sideways and witnessed profit booking till Rs 159. It is bouncing again after a brief consolidation and has taken out the highs of Rs 168. This shows the stock is getting ready for further upsides in the days to come.
On the delivery front, significantly high delivery buying was witnessed in the range of Rs 150-155 during the June series. We believe the stock is unlikely to move below this delivery buying range in the near term and should trade with a positive bias from here onwards.
In the current uptrend, Petronet witnessed buying support near its 50 DMA levels. Currently, the 50 DMA for the stock is placed at Rs 152, which is expected to remain a strong support for the stock on declines."
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