Bears may tighten grip on OMC stocks as Crude Oil trades at 6-week high

OMC stocks are displaying bearish sentiment, if fails to hold key supports then could enter medium-term selling bias.

Oil prices surged for the 6-consectuive week, climbing a 3-month high post displaying a strong accumulation near $70 per barrel from March to June of this year. 

This is the sharpest and straight up jump the Brent Crude has observed following an intense sell-off since March 2022. Technically, a breakout over $90 could accelerate the next move to $100 per barrel. 

Rise in crude oil inversely affects OMC stocks, with Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Indian Oil Corporation have been on a downward spiral since last few sessions. 

Here’s the technical outlook of OMC stocks amid rise in crude oil prices:-

Nifty Oil and Gas Index (NIFTYOILAN) 

Otlook: support at 200-SMA

While the oil index appears to be in a bullish bias, post breaking out of the 200-day simple moving average (SMA) displaying a robust move, the immediate breach of the trend line support has hindered the positive trend.  The support stays at Rs 7,767-level, its 200-SMA. Going forward, stability over the 8,000 mark could recoup the losing strength. CLICK HERE FOR THE CHART

Bharat Petroleum Corporation Ltd (BPCL)

Outlook: Heading towards 200-SMA

Shares of Bharat Petroleum Corporation have broken down on “Double Top” formation, signifying a negative trend for the coming sessions. The stock has subsequently breached the support of R 373, its 50-SMA. At present, the support exists at Rs 344, its 200-SMA. CLICK HERE FOR THE CHART

Hindustan Petroleum Corporation Ltd (HINDPETRO)

Outlook: Heading towards 200-SMA

The breakdown of the “Double Top” has triggered selling pressure, as per the daily chart. Immediate hurdle falls at Rs 279, its 50-SMA, with price action denoting a down move towards Rs 244, its 200-SMA. The present trend appears fragile, with sentiment turning sour.  CLICK HERE FOR THE CHART

Indian Oil Corporation Ltd (IOC)

Outlook: Support of 50-SMA

The counter is facing selling pressure around Rs 98-mark, which it has been struggling to cross. Insufficiency has led to a decline that could further see an acceleration if it breaks Rs 91 its 50-SMA support. The stock may gradually plunge towards 84, which is its previous reversal support. CLICK HERE FOR THE CHART