Robust Call Option Volumes at Key Strike Prices
Data from the derivatives market reveals that ONGC’s call options expiring on 26 May 2026 have attracted significant attention, with three strike prices dominating activity. The 300 strike call option led the pack with 12,830 contracts traded, generating a turnover of ₹1287.49 lakhs and an open interest of 5,129 contracts. This was closely followed by the 290 strike call, which saw 7,431 contracts traded and a turnover of ₹1407.80 lakhs, alongside an open interest of 1,913 contracts. The 295 strike call also recorded notable volumes with 6,645 contracts traded and ₹949.40 lakhs turnover, supported by an open interest of 2,573 contracts.
The underlying stock price stood at ₹291.80, positioning the 290 and 295 strike calls near-the-money, while the 300 strike call is slightly out-of-the-money but evidently attracting speculative interest. The high open interest at the 300 strike suggests that traders are positioning for a potential upward move beyond this level in the coming weeks.
Price Action and Technical Indicators Support Bullish Outlook
ONGC’s stock price has outperformed its sector peers, gaining 5.07% on the day and outperforming the oil sector by 3.69%. The stock has recorded consecutive gains over the past two sessions, delivering a cumulative return of 4.62%. It opened with a gap-up of 2.1% and touched an intraday high of ₹295.50, reflecting strong buying interest.
Technically, ONGC is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a sustained uptrend. This technical strength aligns with the surge in call option activity, indicating that market participants are increasingly confident in the stock’s near-term prospects.
Mojo Score and Rating Revision
Despite the bullish derivatives activity, ONGC’s Mojo Score currently stands at 68.0, with a Mojo Grade of Hold, downgraded from Buy on 8 May 2026. The downgrade reflects a more cautious stance by analysts, possibly due to broader market uncertainties or valuation concerns. However, the large-cap oil company’s fundamentals remain robust, supported by a market capitalisation of ₹3,53,443 crores and a high dividend yield of 4.9%, which continues to attract income-focused investors.
Investor Participation and Liquidity Considerations
While the stock’s delivery volume on 11 May was 26.95 lakh shares, this represented a sharp decline of 67.53% compared to the five-day average delivery volume, suggesting some reduction in long-term investor participation. Nevertheless, liquidity remains adequate for sizeable trades, with the stock’s average traded value supporting trade sizes up to ₹7.88 crores based on 2% of the five-day average.
Implications for Traders and Investors
The concentration of call option activity at strike prices slightly above the current market level indicates a predominantly bullish positioning among traders anticipating further upside in ONGC’s share price. The expiry date of 26 May 2026 is a critical juncture, and the elevated open interest at the 300 strike price suggests that a breakout above this level could trigger additional momentum.
Investors should weigh the technical strength and derivatives market signals against the recent Mojo Grade downgrade and the broader macroeconomic environment impacting the oil sector. The stock’s attractive dividend yield and large-cap status provide a cushion, but volatility around expiry dates can present both opportunities and risks.
Sector and Market Context
ONGC’s outperformance relative to the oil sector, which gained only 0.26% on the same day, and the broader Sensex, which declined by 0.70%, highlights its relative strength amid mixed market conditions. This divergence may be driven by company-specific factors such as operational performance, government policy expectations, or crude oil price movements.
Given the strategic importance of ONGC in India’s energy landscape and its large-cap status, the stock often serves as a bellwether for the oil sector. The current surge in call option interest could be an early indicator of renewed investor confidence in the sector’s recovery prospects.
Conclusion
In summary, the pronounced increase in call option volumes and open interest at the 290, 295, and 300 strike prices ahead of the 26 May expiry reflects a bullish sentiment among market participants towards ONGC. Supported by strong price momentum and technical indicators, the stock appears poised for potential gains in the near term. However, investors should remain mindful of the recent rating downgrade and monitor broader market developments that could influence the oil sector’s trajectory.
