HPCL, BPCL, IOCL: OMCs rally up to 23% in Nov; will they sustain the gains?

Drop in crude oil prices and a bumper profit in Q2 has fuelled the rally so far in oil marketing companies.

Shares of oil marketing companies (OMCs) such as Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL) have rallied 23 per cent, 11.5 per cent and 19 per cent so far in November on the back of a sharp fall in Crude Oil prices, and a bumper net profit in the September quarter.

Brent Crude Oil prices drifted from highs of around $97 per barrel to $80 per barrel as fears of Middle East crisis - the Israel-Hamas war - escalating to neighbouring countries abated. 

Meanwhile on the corporate earnings front, HPCL recorded a consolidated net profit of Rs 5,826.96 crore in Q2FY24, BPCL Rs 8,244 crore and IOCL Rs 12,967 crore. These companies had posted a net loss in the corresponding quarter a year ago.

Presently, here's how these stocks are placed on the charts.

HPCL

Current Price: Rs 307

Resistance: Rs 309

Likely Upside: Rs 325

HPCL is presently trading with a positive bias on the daily scale, with the stock price firmly above all its key moving averages. Further, the 20-DMA Daily Moving Average) at Rs 268 is now on the verge of crossing the 100-DMA at Rs 269 for the first time since August 11, 2023. CLICK HERE FOR THE CHART

The weekly momentum oscillators are clearing in favour of the bulls, indicating fresh impetus on sustained trade above Rs 309. On the upside, sustained trade above Rs 309 can trigger a rally towards Rs 325.

However, momentum oscillators are in overbought zone on the daily scale, hence one need to keep a close eye on Rs 295. Break and sustained trade below the same can trigger a round of price correction, and as such the stock may dip towards Rs 280.

BPCL

Current Price: Rs 392

Resistance: Rs 392

Likely Upside: Rs 440

BPCL too is seen trading with a positive bias on the daily scale, with its 20-DMA just crossing the 100-DMA. The momentum oscillators too remain in overbought zone on the daily scale, but are yet to confirm a negative divergence; hence one should avoid shorting for now.

The weekly chart suggests that the stock needs to trade consistently above Rs 395 for fresh upside. Post breakout, the stock can potentially rally towards Rs 440 its peak in 2021. CLICK HERE FOR THE CHART

IOCL

Current Price: Rs 100.70

Likely Upside: Rs 125

IOCL looks strongest of the three, with the stock seen firmly trading above its weekly hurdle. The near-term bias is likely to remain bullish as long as the stock holds above Rs 97.50, shows the weekly chart. CLICK HERE FOR THE CHART

On a monthly scale, the bias is likely to remain bullish as long as the stock trades above Rs 96. On the upside, the trend line indicates a target of Rs 125.