Shares of India’s major oil marketing companies—Hindustan Petroleum Corporation Ltd. (HPCL), Bharat Petroleum Corporation Ltd. (BPCL), and Indian Oil Corporation Ltd. (IOC)—have surged by over 6% in the last two days.
What’s Driving the Rally in OMCs?
This recent uptrend is attributed to a decline in oil prices and a reduction in the government’s windfall tax and also to Brent crude prices which dipped below $78 a barrel, and West Texas Intermediate (WTI) is near $73.
Recent performance of OMC stocks
HPCL and BPCL have seen their shares rise for the fourth consecutive day, while Indian Oil has experienced gains for the third straight day.
Despite these recent gains, shares of Indian Oil are down more than 4% for August, while BPCL and HPCL have decreased by 1.5% and 1.2%, respectively, for the month.
Year-to-date, HPCL shares have risen over 48%, BPCL shares have surged by 54%, and Indian Oil shares have increased by 32%.
HPCL and BPCL have seen their shares increase for the 4th consecutive day, while Indian Oil has posted gains for the 3rd consecutive day.
What Does The Charts Speaks?
Hindustan Petroleum
Hindustan Petroleum Corporation Limited (HindPetro) has recently shown a “strong technical breakout on the daily chart, signaling a potential upward move,” according to Anshul Jain, Head of research, Lakshmishree Securities. He added that, “the stock has completed a 123-day bullish cup and handle pattern, breaking out at the Rs 385 mark. Interestingly, the base formation saw subdued volumes, but the breakout occurred with normalized trading volumes, indicating a potential shift in market sentiment.”
He suggested that given the fact that, “HindPetro has consistently respected its 20 and 50-day moving averages, reinforcing the bullish trend. With the current market price at Rs 395, investors may consider buying with a stop-loss on a close below Rs 365. The immediate target is Rs 445, offering an attractive upside for short-term traders.”
Indian Oil Corporation
According to Anshul Jain, Head of Research, Lakshmishree securities Indian Oil Corporation (IOC) is currently shaping up a 132-day long cup and handle pattern, a bullish signal with the handle still forming. The handle’s base has seen drying volumes, suggesting accumulation—a key precursor to a breakout.
“The Relative Strength Index (RSI) on weekly and monthly charts is in a bullish trajectory, and the daily RSI is rebounding from oversold levels, adding further credibility to the potential upside. With the current market price at Rs 171, IOC is a preemptive buy for traders targeting the neckline at Rs 185. A decisive breakout above Rs 185 could propel the stock towards the Rs 225 level,” added Jain
He also said that given this technical setup, IOC presents a compelling opportunity for investors looking to capitalize on its potential upward momentum.
Bharat Petroleum
Bharat Petroleum Corporation Limited (BPCL) has made a decisive move, breaking out of a 129-day bullish cup and handle pattern at the Rs 334 level according to Jain, Head of research, Lakshmishree Securities, “this technical breakout is a strong indicator of potential upside, especially as volumes that were previously dried up in the base are now rising on rallies. The breakout itself occurred on normal volumes, and traders should watch for an increase in volume during any retest of the pattern.” Jain further added.
Jain suggested that with the current market price at Rs 350, BPCL is a buy, with investors encouraged to add on dips towards Rs 334. A closing stop-loss below Rs 310 is advised, targeting an immediate upside of RS 445. This setup positions BPCL as an attractive opportunity for those seeking substantial gains.
(The Above Recommendations are shared by Anshul Jain, Head of Research, Lakshmishree Investment & Securities)
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