Over the past 1 month, a sell-off in the petrolium sector has resulted in a breakdown in the co-relation between Hindpetro and IOC, thus widening the historical price ratio relationship. One year co-relation between Hindpetro and IOC is at 94%.
We recommend traders to go long on IOC (1 Lot Aug futures and 250 shares in cash) and short HINDPETRO (1 lot Aug futures) at price ratio below 1.22 for a target of 1.05 with Stop loss placed at 1.33.
HINDPETRO August Future CMP : 314.35
IOC August Future CMP : 251.95
*~Outlflow(`1.5lacs), Time horizon - 2 to 3 months
Disclosure/Disclaimer
This strategy is giving me profit of 19253+ and closing this call..Enjoying!!!
ReplyDeleteIOC CMP 255.40
DeleteHPCL CMP 299.20