ONGC, IOC, GSPL: Crude hits $71; is it time to focus on oil-related stocks?

ONGC and GSPL have registered a breakout and may surge over 20 per cent in the coming sessions, charts show

Oil-linked stocks were trading actively on the BSE, on Monday, as Brent crude futures surged above $70 a barrel for the first time since the Covid-19 pandemic began, following reports of attacks by Yemen's Houthi forces on Saudi Arabian facilities.

Brent crude futures for May hit $71.38 a barrel in early Asian trade, the highest since January 8, 2020, and were at $71.11 a barrel by 0255 GMT, up $1.75, or 2.5 per cent. Brent and WTI prices are up for the fourth consecutive session after OPEC and its allies decided to keep production cuts largely unchanged in April.

At 11:35 AM, the S&P BSE Oil & Gas index was trading 2.33 per cent higher at 16,466 levels as compared to the 0.6 per cent gain in the benchmark S&P BSE Sensex. Oil marketing companies (OMCs) such as Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) traded over 2 per cent, each, while Indian Oil Corporation (IOC) gained as much as 3.55 per cent during intra-day trade.

Oil exploration and distribution firm Oil and Natural Gas Corporation (ONGC) traded 6.4 per cent higher at Rs 122.30 levels. GAIL India, too, was trading around 7.3 per cent higher at Rs 157.95

Paint stocks, on the other hand, were trading in the red. For instance, Asian Paints slipped as much as 1.1 per cent before staging a recovery, Berger Paints also dipped as much as 1.1 per cent. Kansai Nerolac was trading flat. Crude oil derivatives are one of the key raw materials for paint manufacturers. Hence, a rise in crude oil is a negative for these companies.

In that backdrop, here's how the oil-linked stocks look on charts:

Bharat Petroleum Corporation Ltd (BPCL): With a breakout above Rs 440 levels, the counter is attempting to firmly conquer Rs 480 mark. When that happens, the next breakout may see a rally towards Rs 510 and Rs 540 mark. The overall structure denotes the breakout of Ascending Triangle,  as per the weekly chart. The immediate closing basis support comes at Rs 460 and Rs 440 levels, as per the daily chart. CLICK HERE FOR THE CHART

Indian Oil Corporation Ltd (IOC):  A firm breakout above Rs 105 may see a sharp upside towards the next resistance of Rs 120 mark, as per the weekly chart. The Moving Average Convergence Divergence (MACD) has crossed the zero line upward, suggesting that the direction and momentum may stay in the upward bias. The medium term trend is bullish, until the counter defends the support of Rs 94 levels. The immediate support comes at Rs 100 levels, as per the daily chart. CLICK HERE FOR THE CHART

Oil & Natural Gas Corporation Ltd (ONGC):  The breakout above Rs 110 indicates a rally towards Rs 130 levels from a medium-term perspective. The Relative Strength Index (RSI) has a support of Rs 63 value. Till this support is held, the upside bias may see an addition in volume. A close above Rs 120 may see market participants taking interest in the stock, as per the daily chart. The support comes at Rs 110 levels. CLICK HERE FOR THE CHART

Gujarat State Petronet Limited (GSPL): The recent gap-up session witnessed a selling pressure around Rs 310 levels. This resistance, if conquered, may prompt an upside bias which may see a rally towards Rs 330 and Rs 350 levels, as per the daily chart. The immediate closing basis support comes at Rs 280 levels. The volumes have seen a continuous increase in the last three weekly sessions, reflecting the interest of market participants. CLICK HERE FOR THE CHART
 
Asian Paints Ltd (ASIANPAINT):  This counter needs to firmly rally above the resistance of 100-day moving average (DMA), currently placed at Rs 2,415 levels, to cross the crucial resistance of 50-DMA, placed at Rs 2,541 levels. The RSI has a resistance of Rs 50 value -- upon crossing this mark, the upside strength may see an addition of momentum. Likewise, the MACD has a double bottom formation, suggesting the lower weakness may see accumulation, as per the daily chart. CLICK HERE FOR THE CHART

Pidilite Industries Ltd (PIDILITIND): This counter needs to conquer the resistance of Rs 1,800 levels to rally ahead. The MACD is making efforts to cross the zero line upward, which may help strengthen the upside momentum. The support comes at Rs 1,669 levels, which is its 100-DMA. The current momentum indicates a sideways movement. CLICK HERE FOR THE CHART