Hold on to oil stocks: Jitendra Mehta

Jitendra Mehta, Technical Analyst, Edelweiss, discusses the reaction of oil stocks following the RIL-RNRL gas agreement on ET Now.

The whole pack has seen a significant amount of excitement. All these OMCs, including ONGC which is up 7%. You have got IOC, HPCL, BPCL, all of them in excess of the double digit gains coming in to about 15% gains, rerating in the annual here for most of these companies according to you and what would you do with these stocks right now?

Definitely after such a big announcement, the reaction has been a knee jerk reaction and particularly double digit gains in the stocks are pretty rarely seen. You just left the school off and play a long trade here. There would be substantial upside left even from these levels, but one needs to see what kind of risk reward is there if you are entering the trade now. If you are already in the trade, it is worth a hold.