Here's how you can trade BPCL, HPCL and IOC amid oil turbulence

A technical outlook on Indian oil marketing companies (OMCs) amid US-Iran tensions

Oil prices have been on an uptrend since January 3 when a US strike killed an Iranian general, thus raising the spectre of a spiralling conflict and disrupted oil supplies. International benchmark Brent crude shot up close to $71 per barrell before paring some of the gains. 

Reacting to the attack, the benchmark S&P BSE Sensex tanked 788 points and the Nifty slipped 234 points on Monday. While the indices recovered some of the losses the following day, the world's third biggest oil consumer is still staring at potential supply disruptions, and the consequent rise in the import bill due to surging crude oil prices.

In the latest developments, Iran on Wednesday fired rockets at an Iraqi airbase that hosts US military forces, again sending the Brent crude futures as high as $69.83 a barrell.

In three sessions since January 3, the stock price of Bharat Petroleum Corporation Limited (BPCL) has dipped 5.64 per cent, while Hindustan Petroleum Coporation Ltd (BPCL) tanked 10 per cent. Indian Oil Corporation (IOC) slipped 1.85 per cent. In comparison, the benchmark S&P BSE Sensex lost 1.8 per cent.

Amid such turbulence, here's a look at what the technical charts are saying about the oil marketing companies (OMCs) and how you can trade them.

 
Bharat Petroleum Corporation Ltd (BPCL): This counter sustained major weakness when it traded below its 50-day moving average (DMA). Now, trading at around 100-DMA levels, it is signalling a reversal. However, if the reversal fails, then further sell-off may lead the stock to Rs Rs 435 and Rs 420 levels as per the daily chart. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are trading with a negative crossover, which suggest negative outlook for the short-term. CLICK HERE FOR THE CHART

Hindustan Petroleum Corporation Ltd (HINDPETRO): The counter breached major support of Rs 255 and is moving towards more correction, as per its daily chart. This selling pressure may lead the stock price to retest earlier reversal level of Rs 220. If the downfall continues with Gap down in next few sessions, then this level may not even hold. The RSI has entered the oversold territory, which may provide some relief. However, till the RSI trades in oversold condition, the risk ratio does not favour long trade. CLICK HERE FOR THE CHART

Indian Oil Corporation Ltd (IOC): This counter needs to close above Rs 129 to regain the losing upward trend. The range of Rs 120 – 122 -- where buying was last seen -- remains the support level. The current momentum indicates upward bias as neither RSI nor MACD are showing major weakness, The RSI is trading above oversold condition and MACD is rising towards zero line with a positive crossover. CLICK HERE FOR THE CHART