Is it time to look at oil marketing companies(OMC) stocks?
Published On: Monday, July 26, 2021 | By: Team KnowMyStock
Crude prices have recovered from last week's low of $67.42, although the momentum is not showing much excitement. In the meantime stocks of oil marketing companies (OMCs) are witnessing some profit-taking. Shares of BPCL and Hindustan Petroleum Corporation (HPCL) have declined over 10 percent from the highs touched last month. But a rebound in the last couple of sessions signals stocks could gain momentum. Here is some technical analyses of some major OMCs: S&P BSE OIL & GAS Outlook: Weak momentum at current levels The index has broken its 50-days moving average (DMA) and 100-DMA placed at 16,356 and 15,778, respectively, suggesting resistance at higher levels. The next support for the index comes at its 200-DMA, placed at 14,745, as per the daily chart. While the current momentum indicates weakness, a firm close above 100-DMA may help the index regain positive strength, following which a rally towards 50-DMA is likely.
Bharat Petroleum Corporation Ltd
Likely target: Rs 500 to Rs 520
Upside potential: 8% to 13%
The stock has formed a "Rising channel" pattern. As long as the lower rising trendline, placed at Rs 440, is held firmly, the upside bias may move towards Rs 500 and Rs 520 levels that are near to the upper rising trendline, as per the weekly chart.
Hindustan Petroleum Corporation Ltd
Likely target: Rs 287 (current 50-DMA)
Upside potential: 4%
After a gap-down close below the support of Rs 293 levels, the stock has broken its 50-DMA placed at Rs 282.70. This move has dismantled the upside bias at current levels. That said, the lower support of 100-DMA, placed at Rs 263.30, is capping the negative sentiment. The overall trend may regain positive momentum as long if the 100-DMA is protected.
Reliance Industries Ltd
Outlook: A breakout above Rs 2,160 may give 5% return
The formation of a "Golden Cross" pattern is protected by 200-DMA, placed at Rs 2,039 levels. The immediate support comes at 100-DMA or Rs 2,067 levels. That said, a breakout above Rs 2,160 may result in a sharp rally towards Rs 2,250 and Rs 2,300 levels. The RSI is trading in a tight range of 53 to 40 value; thus, any trigger above this range may add strength to the price action.
Oil & Natural Gas Corporation Ltd
Likely target: Rs 132.80
Upside potential: 12%
The "Higher High, Higher Low" formation suggests a positive outlook for the stock, as per the weekly chart. The resistance falls at Rs 132.80 levels, which is its 200-weekly moving average (WMA). As long as the support of Rs 110 is held on a closing basis, the upside bias could gain traction.
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