HPCL, BPCL, and IOC Surge Up to 3%, Investors Urged to Monitor Technical Charts Amidst Crude Oil Price Decline and Excise Duty Hike.
Oil PSU Stocks: On Tuesday of this week, shares of state-owned oil companies such as HPCL, BPCL, and IOC witnessed a surge of up to 3%. This upswing is attributed to two primary factors: firstly, the government's increase in excise duty on petrol and diesel by ₹2 per liter, and secondly, the sharp decline in crude oil prices in the United States.
Significant Crude Oil Price Drop Offers Relief to Companies
Over the past four days, US crude futures have plummeted by more than 15%, currently trading near $61.50 per barrel—approximately 24% below this year's high of $80.40. This falling oil price reduces costs for oil marketing companies (OMCs) and could boost margins.
Impact of Excise Duty Increase Expected to be Limited
Although the government has increased excise duty, market experts believe its impact on these companies' earnings will be minimal. Technical charts suggest that HPCL and BPCL stocks still show potential for significant growth.
HPCL (Hindustan Petroleum)
Current Price: ₹363
Potential Return: 29.5%
Support Levels: ₹346, ₹335, ₹324
Resistance Levels: ₹373, ₹397
HPCL maintains b support near its 20-month moving average. If it closes above ₹373 and ₹397, its next target could be ₹470.
BPCL (Bharat Petroleum)
Current Price: ₹280
Potential Return: 30.4%
Support Levels: ₹275, ₹255
Resistance Levels: ₹295, ₹300
If BPCL remains above ₹275 and breaks the resistance at ₹300, it could potentially reach ₹365.
IOC (Indian Oil)
Current Price: ₹130
Potential Decline: 23.1%
Support Levels: ₹122.80, ₹114
Resistance Levels: ₹134.50, ₹140
IOC currently exhibits a weak technical position. Investment is advised against until a b breakout above ₹140 is observed.
Investor Recommendation
Stocks like HPCL and BPCL are considered favorable for investment at current levels, especially given the continuous decline in crude prices. However, caution is advised with IOC until a robust breakout occurs.
(Disclaimer: This report is for informational purposes only. Consult your financial advisor before making any investment decisions.)
