BPCL, HPCL, IOC: Brent crude fall may trigger short-term rally in OMCs

BPCL, HPCL and IOC may rise up to 11 per cent in coming sessions, and if they manage to sustain their upward rally, medium-term bias may strongly shift in bull's favour.

Shares of domestic oil marketing companies will remain in spotlight after Brent Oil Futures slipped to a fresh 3-month low, negating the recent signal of reversal aimed at crossing $90 per barrel. Such technical moves suggest underlying weakness and may lead to further decline in the commodity.

Listed players in oil marketing companies such as Bharat Petroleum Corporation and Hindustan Petroleum Corporation zoomed over 6 per cent, while Indian Oil Corporation gained 2 per cent on Thursday.

The descend in the crude price has enabled these oil marketing players to reclaim the upward move, that had been lost due to the present ambiguous market sentiment. 

Bharat Petroleum Corporation conquered the 5-week high, while Hindustan Petroleum Corporation surpassed the 6-week high. Indian Oil Corporation only succeeded to cross the previous week’s high. 

Here's the technical outlook of OMC stocks amid fall in the crude oil prices:-

Bharat Petroleum Corporation Ltd (BPCL)

Likely target: Rs 380

Upside potential: 7%

A decisive close over Rs 355 may trigger a robust upside in the stock, as it will lead to the breakout of the “Golden Cross”, as per the daily chart.  The positive sentiment shall rally towards Rs 380, with the support of Rs 330 level. 

The Moving Average Convergence Divergence (MACD) has risen over the zero line, indicating that the current momentum is headed in the upward direction. CLICK HERE FOR THE CHART

Hindustan Petroleum Corporation Ltd (HINDPETRO)

Likely target: Rs 265

Upside potential: 9%

A trendline breakout has pushed the counter in the short-term bullish zone. The current move is well-supported by volumes, signifying greater interest in the stock. Hereon, every close over Rs 235 shall build a positive bias, as it was its earlier hurdle mark. The stock is pointing a move in the direction of Rs 265. 

The support for the stock exists at Rs 233, followed by Rs 225 level, as per the daily chart. CLICK HERE FOR THE CHART

Indian Oil Corporation Ltd (IOC)

Likely target: Rs 95

Upside potential: 11%
 

While there is price divergence on the Relative Strength Index (RSI), the stock’s price action is not letting selling pressure to dominate the trend. The 200-day moving average (DMA) is set at Rs 73.35-mark and until the stock holds this support mark firmly, the corrective moves are expected to see accumulation. 

The broader trend points to a sideways trend, however a gradual up move cannot be ruled out. The immediate hurdle comes to Rs 85; which once get crossed, the counter may head in the direction of Rs 95. CLICK HERE FOR THE CHART