HPCL, BPCL, IOC: Will petrol, diesel price cut derail rally in OMCs?

Shares of OMCs have rallied around 50 per cent in the last two months on the back of strong Q2 earnings. Can a fuel price hike derail the rally? Here's what the chart suggests.

Shares of Oil Marketing Companies (OMCs) - Hindustan Petroleum  (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) were under pressure in intra-day deals on Friday following reports of a likely cut in petrol and diesel prices.

According to reports, with general elections expected to be scheduled in the first half of 2024, the government is considering reducing prices of petrol and diesel in the near future. The said move could cheer the common man, and also aid in easing the inflation. 

Shares of OMCs have outperformed the benchmark indices in the last two months with a rally of around 50 per cent, backed by strong Q2 earnings, as they benefitted from lower crude oil prices. In the last three months, Brent Crude has hovered around the $80 per barrel mark.

However, given this backdrop, here are the key levels to watch out for these three stocks.

HPCL

Current Price: Rs 405

Support: Rs 378

HPCL dipped 4 per cent to a low of Rs 399.70 in Friday morning opening trades, but has since the stock has recouped some of the losses and trades around Rs 405.

Any dip at the counter can be considered as a buying opportunity, as the trend is clearly positive for the stock on the charts. The price-to-moving averages action is favourable on multiple time-frames, with monthly chart suggesting that the bias is likely to remain favourable as long as the stock trades above Rs 355 level.

In the interim, undue selling pressure at the counter, could see the stock slip towards its 20-DMA (Daily Moving Average) at Rs 378-odd levels. The stock has consistently traded above the 20-DMA since early November, hence one can expect considerable support around this level.

On the upside, the stock needs to trade consistently above Rs 409 for the up move to resume. CLICK HERE FOR THE CHART

BPCL

Current Price: Rs 453

Support: Rs 448; Rs 430

Shares of BPCL touched a low of Rs 449, wherein the stock is seen testing support at its 20-DMA which stands at Rs 448. Even as the price-to-moving averages action remains favourable for the stock, select momentum oscillators have turned negative on the daily chart, thus signaling a possibility of further downside in the near term.

In case, the stock breaks support at Rs 448, it could slide towards the lower-end of the anticipated trading band which also coincides with the Super Trend Line support at Rs 430 levels.

Similarly, the weekly chart suggests that the up move for now may be capped around Rs 465 levels. Whereas, as per the monthly chart, the long-term bias is likely to remain positive as long as the stock sustains above Rs 412. CLICK HERE FOR THE CHART

IOC

Current Price: Rs 131

Support: Rs 122; Rs 117; Rs 112

IOC is trading with a loss of 2 per cent in intra-day deals on Friday. The stock has rallied 57 per cent in the last two months. The weekly chart suggests that the bias is likely to remain bullish as long as it holds above Rs 128. Similarly, the long-term trend is likely to remain positive as long as the stock trades above Rs 113.

Meanwhile, in the near-term failure to cross and sustain above Rs 132, could push the stock lower towards its 20-DMA at Rs 122 levels, below which the next significant supports are placed at Rs 117 and Rs 112. CLICK HERE FOR THE CHART