Petrol price hike on cards post election outcome? Here's how to trade OMCs

The OMC stocks needs to cross and sustain crucial supports to gain on follow-up momentum.

The last phase of West Bengal state assembly elections will conclude today, bringing an end to a month long poll saga. The results for the same will start pouring-in on May 2.

As the power struggle in Bengal picked pace early this month, Centre reportedly asked oil marketing companies to hold fuel prices steady as soaring petrol and diesel prices could hit winning prospects. 

Now, petrol and diesel prices may increase soon by early next month with oil companies looking to raise the retail price of the two auto fuels between Rs 2 and Rs 3 per litre in phases and make up for the losses they incurred by keeping the prices at artificially low levels in the run up to the local elections.

Following six months of relentless price hikes, fuel prices have remained unchanged since April 15. In all, petrol prices have fallen by 77 paisa per litre while diesel by 74 paisa per litre in 2021 so far. Earlier, petrol and diesel prices were increased 26 times in 2021 with the two auto fuels increasing by Rs 7.46 and Rs 7.60 per litre respectively so far this year.

Against this backdrop, is it time to buy OMC stocks? Here's what charts say.

S&P BSE OIL & GAS
Likely target: 15,172 (if holds momentum above 14,752)
Upside potential: 2.85%

Although the Relative Strength Index (RSI) has crossed the resistance of 48 mark, the index needs to firmly hold above the 100-DMA, which is currently placed at 14,752 levels. If that happens, the index may see a rally towards the next resistance of 15,172 levels in the days ahead, which is its 50-DMA, as per the daily chart. The support comes at 14,500 mark. CLICK HERE FOR THE CHART
 
HPCL (HINDPETRO)
Level to watch: Rs 236 

The formation of the “Head and Shoulder” has dented the upside bias, as per the daily chart. A breach below Rs 240 levels indicates weakness. A falling trendline resistance shows selling pressure around Rs 236 levels. However, until the support of 100-DMA, which is placed at Rs 229.5, does not get breached decisively, the counter is expected to hold the sideways momentum.  CLICK HERE FOR THE CHART
 
Bharat Petroleum Corporation Ltd (BPCL)
Likely target: Rs 432.60 -  Rs 440
Upside potential: 2.51%  - 4.27%

A double-bottom breakout above Rs 416 has seen the counter rally. It now attempting to absorb the selling pressure emerging above Rs 420 levels. The immediate support comes at Rs 415 levels, which also is its 100-DMA. If this is held on a closing basis, counter can then move towards Rs 432.60 (50-DMA) and then Rs 440 levels, as per the daily chart. CLICK HERE FOR THE CHART
 
Indian Oil Corporation Ltd (IOC)
Likely target: Rs 91
Upside potential: 2%

Although the counter has crossed its 200-DMA, it now needs to cross the significant horizontal resistance of Rs 91. If that happens, the stock can move higher towards Rs 95 levels, which is its 100-DMA, as per the daily chart. Until the counter trades above its 200-DMA - placed at Rs 89 levels - the upside bias remains strong. CLICK HERE FOR THE CHART