5 stocks to buy and sell as crude oil prices drop to $70 a barrel

Here's a technical outlook on stocks linked to crude oil prices, which is down 23% from its peak and trades near 3-year lows. Among stocks, Asian Paints and MRF look favourable on charts; here's why.

Crude Oil prices have declined nearly 13 per cent so far in the month of September amid demand concerns from the two biggest world economies - the US and China. In the process, the Crude Oil prices are now seen trading to near about 3-year lows. 

The Brent Crude Oil futures tanked to a low of $68.67 per barrel this week, down below the $70-mark for the first time since December 2021. Brent Crude Oil has recouped some of its losses, and today was seen quoting around $71 per barrel. 

Technically, Brent Crude Oil futures were seen testing support around its 100-MMA (Monthly Moving Average) at $69.40 levels. Chart suggests that the near-term bias for Crude Oil is likely to remain tepid as long as oil prices trail below $73 levels.

 

Similarly, the US WTI Crude Oil futures were seen trading around $67.67 per cent on Thursday.

In the Indian stock market context, lower crude oil prices augur well for select sectors such as oil marketing companies, aviation and paints; whereas, oil producers may feel the pinch.

Brent Crude Oil prices have declined from a peak of $91 per barrel in April, down 23 per cent as of date. In the same period, stocks such as InterGlobe Aviation (IndiGo) and Hindustan Petroleum (HPCL) have soared up to 38 per cent. READ MORE

Given this background here are 5 stocks ideas  related to oil prices, which could see a sharp move in the coming sessions:

Asian Paints

Current Price: Rs 3,371

Upside Potential: 16%

Support: Rs 3,292; Rs 3,150

Resistance: Rs 3,450; Rs 3,500; Rs 3,570

Asian Paints stock has given a breakout on the weekly scale; the near-term bias is likely to remain upbeat as long as the stock holds above Rs 3,292. On the upside, the stock is seen trading very close to its existing higher-end of the trading range at Rs 3,450. 

The stock has broadly traded in the Rs 2,650 - Rs 3,500 range since April 2021. With key momentum oscillators, both on the weekly and monthly scale in favour of the bulls the stock may attempt to break on the upside. The stock will need to clear hurdles around Rs 3,450, Rs 3,500 and Rs 3,570 for opening the doors for a sustained rally towards Rs 3,912 levels.

On the way down, below the support at Rs 3,292, the stock can potentially re-test of Rs 3,150 levels. CLICK HERE FOR THE CHART

ONGC

Current Price: Rs 288

Downside Risk: 11.8% 

Support: Rs 274; Rs 268

Resistance: Rs 294; Rs 313; Rs 317

ONGC stock has plunged 14 per cent thus far in September. Amidst this, the ONGC has dipped below its 20-, 50- and 100-DMAs. The stock seems on course to test support around its 200-DMA at Rs 265; below which test of Rs 254 - its 50-WMA (Weekly Moving Average) also seems possible. Interim support for the stock can be expected around Rs 274 and Rs 268.

For now, the stock is seen struggling around its 100-DMA at Rs 294. In case of a pullback, the stock is expected to face resistance around Rs 313 - Rs 317 levels. The 20-DMA is fast seen converging towards the 50-DMA, a downward crossover could further dampen the mood at the counter. CLICK HERE FOR THE CHART

Oil India

Current Price: Rs 578

Downside Risk: 19.90% 

Support: Rs 535; Rs 528

Resistance: Rs 616; Rs 657

Oil India has tumbled over 22 per cent thus far this month. The stock is now trading below its 20- and 50-DMA for the first time in 3 months; further, the stock seems on course to test the 100-DMA support at Rs 528 levels.

Prior to this month's correction, Oil India stock had zoomed 389 per cent from levels of Rs 157 in June 2023 to a high of Rs 768 in August 2024 - just 14 months. Given the current price correction, 38.2 per cent retracement of the earlier rally, suggests support for the stock at Rs 535 levels; below which the next logical downside target shall be Rs 463.

In case of a pullback, the stock is expected to face resistance around Rs 616 and Rs 657 levels. CLICK HERE FOR THE CHART

Indian Oil (IOC)

Current Price: Rs 172

Upside Potential: 10.5%

Support: Rs 166 

Resistance: Rs 174; Rs 181

The weekly chart of Indian Oil Corporation (IOC) suggests that the stock has consistently found support around its 20-WMA (Weekly Moving Average) in the last three months. The 20-WMA support now stands at Rs 166 and is likely to act as key bullish pivot for the stock, as it also coincides with the 100-DMA.

On the upside, the stock may look to jump back to Rs 190 levels; with interim resistance seen at Rs 174 and Rs 181 levels. CLICK HERE FOR THE CHART

MRF

Current Price: Rs 1,36,150

Upside Potential: 15.9%

Support: Rs 1,34,000; Rs 1,32,550

Resistance: Rs 1,40,700; Rs 1,42,500; Rs 1,46,000

MRF stock is seen attempting a breakout above its 20-DMA, which stands at Rs 1,36,135 levels. In the last few days, the stock has been trading in a congestion zone of Rs 1,34,00 - Rs 1,37,000. Select key momentum oscillators have shown positive crossover on the daily chart; hence the stock may attempt to edge higher in the coming sessions.

As such, the stock can potentially rally all the way to a new high around Rs 1,57,750 levels, suggests the long-term chart. Interim resistance for the stock can be expected around Rs 1,40,700, Rs 1,42,500 and Rs 1,46,000 levels.

For now, key support on the downside for MRF stands at Rs 1,34,000; below which it can potentially dip to Rs 1,32,550 levels. CLICK HERE FOR THE CHART