BPCL, IOC face 200-DMA hurdle despite Brent Crude slipping to 7-mth low

Barring Indian Oil Corp, which gained over 4%, the other two oil marketing companies, BPCL and HPCL, trade with negative returns on YTD basis and have immensely underperformed benchmark indices

After an incredible rally in March that saw Brent Crude Oil hitting a decade high of $139 a barrel, the commodity has tanked to a seven-month low last week to $87.72 per barrel.

Until this June, Brent Crude made several attempts to cross the $125 per barrel resistance level after there was strong profit booking once the commodity hit a decade high level. The bulls thereafter lost grip on the crude benchmark as it failed to cross this milestone and tumbled nearly 30 per cent. Oil prices ever since traded with a negative bias.

Back home, shares of India’s state-owned fuel retailers Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation have gained a marginal 2-4 per cent so far this month. Barring Indian Oil Corporation, which has gained over 4 per cent, other two fuel retailers trade with negative returns on year to date basis (YTD), immensely underperforming the benchmark and broader markets.

On Monday, reports suggested that the goverment may infuse up to Rs 20,000 crore in these OMCs to partly compensate them for losses incurred in selling fuel at a subsidised rate, and to keep a check on cooking gas prices.

Meanwhile, here’s a technical outlook of state-owned fuel retailers:-

Bharat Petroleum Corporation Ltd (BPCL)

Outlook:  Breakout above 200-DMA

The stock price of Bharat Petroleum Corporation has not done well since 2017, and currently hovers around the same levels. The present structure indicates a hurdle for the stock at its 200-day moving average (DMA), which the stock so far has failed to cross on three occasions in the last 11 months. The 200-DMA is positioned at Rs 343-mark.

Only a sustained move with simultaneous positive closes over the 200-DMA might see a fresh breakout. If that happens, the stock can rally to Rs 365 level, its next imminent barrier. CLICK HERE FOR THE CHART

Hindustan Petroleum Corporation Ltd (HINDPETRO)

Outlook:  Breakout above 200-DMA

Post recording its 52-week low in June this year, Hindustan Petroleum Corporation rallied smartly with a “Higher High, Higher Low” formation, until it faced selling hurdle at its 200-DMA. The 200-DMA for the stock is now positioned at Rs 255-mark. The broad trend is up with a cushion of Rs 233 level, shows the daily chart.

If the stock conquers the 200-DMA, the bulls could gear-up to see Rs 290 mark. CLICK HERE FOR THE CHART

Indian Oil Corporation Ltd (IOC)

Outlook: Hurdle at 200-DMA
 

For the Indian Oil Corporation stock, the 200-DMA, the immediate resistance comes to Rs 74.50. The support for the stock is at Rs 70.60 mark, its 50-DMA. The overall chart structure appears to be moderate and progressing gradually. The Moving Average Convergence Divergence (MACD), a technical indictor to gauge the underlying momentum, trades over the zero line suggesting a positive bias. A breakout over 200-DMA could see rally towards Rs 81 level. CLICK HERE FOR THE CHART

Oil & Natural Gas Corporation Ltd (ONGC)  

Outlook: Lethargic trend beneath 200-DMA 

There is a formation of “Death Cross”, which symbolizes bearishness, on the daily chart. Thus, the stock is likely to remain sluggish and lethargic beneath the 200-DMA. The immediate basis support for the stock is seen at Rs 129.70, which is its 50-DMA. The 200-DMA is placed at Rs 147 level.

Only on break and sustained trade above the 200-DMA, the stock can exhibit bullishness with an upside target at Rs 170 mark.  CLICK HERE FOR THE CHART