Trading strategies for oil-related stocks as Brent crude tops $105 level

SpiceJet, Berger Paints and BPCL look weak on charts, while ONGC could gain another 4-8%.

Brent Crude topped the $105-level for the first time since 2014 as Russia launched an offensive invasion of Ukraine on Thursday. The geopolitical event further tighten the oil supply and invited sanctions from the western world.

The shocking onslaught, shook markets acorss the globw - European markets plunged nearly 4 per cent, while Indian indices BSE Sensex and Nifty 50 dived 5 per cent each on Thursday. The Indian benchmark indices posted their biggest intraday loss on Thursday, since the sudden Covid-19 led lockdown in March 2020.

Shares of oil related stocks displayed a mixed trend on the last day of the current week. Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd were trading marginally positive, up a per cent each, while aviation stocks like SpiceJet and InterGlobe Aviation soared over 7 per cent each. 

 

Here’s How to trade oil-related stocks as Brent crude surges:-
 
Oil & Natural Gas Corporation Ltd (ONGC) 
Likely target: Rs 165 and Rs 172
Upside potential: 4% to 8%

The medium-term outlook for the oil major is placed well on the weekly chart. The “Golden Cross” of 50-weekly moving average (WWA) with 200-WMA displays a bullish trigger. In addition, the recent weakness due to the escalation of conflicts between Russia-Ukraine, which saw global markets bleed, did not have much of an impact on ONGC. The stock defended the 50-day moving average (DMA) set at Rs 156.90 and succeeded in showing a reversal today. For now on, the stock needs to uphold the 50-DMA, which can push the stock price towards the resistance of Rs 165 and further to Rs 172.  CLICK HERE FOR THE CHART

SpiceJet Limited (SPICEJET)
Likely target: Rs 50
Downside potential: 15%

The foremost gap-down range in the late November 2021 wrecked the bullish bias of the stock, shows the daily chart. The Gap range of Rs 80.30 to Rs 79.40 is still open, not yet filled indicating weakness. It then followed another simultaneous gap down, which further dismantled the bullish bias. The current strength is fragile and looks to see further downside. The immediate resistance comes at Rs 66 to Rs 64 with downside bias hinting at Rs 50 level. CLICK HERE FOR THE CHART
 
Hindustan Petroleum Corporation Ltd (HINDPETRO)

Outlook: Cautious, downside of 10% cannot be ruled out.

The chart formation, candlestick pattern and moving average support, all of which exhibit a cautious outlook for shares of Hindustan Petroleum Corporation Ltd. The stock has a Head and Shoulder formation, a bearish setup. It has broken 200-DMA placed at Rs 289.40 with a massive gap-down close, supported by robust volumes. The broader outlook indicates a downside towards Rs 250 – Rs 240 range, according to the daily chart. CLICK HERE FOR THE CHART
 
Berger Paints India (BERGEPAINT)
Outlook: Needs to reverse and sustain above Rs 700

The shares of Berger Paints violated two major supports lately. These supports were at Rs 720 and Rs 700 levels. If the stock fails to show recovery in coming few sessions, then it could dip another 10 per cent, according to the daily chart. It may enter a medium-term downside on losing to rebound.  CLICK HERE FOR THE CHART

Bharat Petroleum Corporation Ltd (BPCL)
Outlook: Simultaneous gap-downs signal weakness

The recent continuous negative closes in gap-down setup raised alarm for the shares of Bharat Petroleum Corporation Ltd. The stock can slide further and could add more selling pressure, as per the daily chart. The trend is weak suggesting a negative downside towards Rs 300 level. The immediate resistance comes at Rs 350 and Rs 360 levels. CLICK HERE FOR THE CHART