A Technical Look: Dividend-Paying OMCs on the Run as Oil Prices Tumble!

  • Stock Market Analysis

Oil prices have been seeing some selling pressure for the last few sessions. The demand for oil had already been reducing over the concerns of a global recession but a recent report from global analytics firm Moody’s forecasted a fall to US$70 per barrel by the end of the next year which further dented investors’ sentiments.

On the MCX, crude oil Aug futures is currently trading with a cut of around 4% to 7,230, which is around a 6-month low. As oil prices are plunging primarily over recessionary concerns, OMCs (oil marketing companies) are enjoying a fall in oil prices. Easing oil prices not only increases the demand for retail petroleum products but also helps to improve net marketing margins for these OMCs. As these petroleum retailers are in buzz today, let's have a technical look at them.

Indian Oil Corporation Limited 

Indian Oil Corporation Ltd (NS: IOC ) has a market capitalization of INR 1,01,037 crores and is primarily engaged in the refining and sale of petroleum products. It is one of the investors’ favorites as the stock is a dividend star, currently trading at a yield of 11.45%. Today, the share price of IOC surged 2.31% to INR 73.2 by 3:23 PM IST and is nearing the upper resistance of a consolidation range. 

Daily chart of IOC with volume bars at the bottom

Image Description: Daily chart of IOC with volume bars at the bottom

Image Source: Investing.com

On the upside, there is a decent resistance around INR 73.7 - INR 74, above which a quick move to the next peak of INR 76 could be witnessed. It is a slow-moving stock, hence erratic rallies should not be expected.

Bharat Petroleum Corporation Limited

The next stock on the list is Bharat Petroleum Corp. Ltd. (NS: BPCL ) which is a bit smaller than IOC, with a INR 72,203 crores market cap. Today, BPCL shares surged 3.7% to INR 346.3 and is trading at the highest level since 18 May 2022, all thanks to a massive breakout on the chart. The stock trades at a dividend yield of 4.72% and is going ex-dividend on 19 August 2022 against a dividend of INR 6 per share.

Daily chart of BPCL with volume bars at the bottom

Image Description: Daily chart of BPCL with volume bars at the bottom

Image Source: Investing.com

With today’s move, the stock sliced through its immediate resistance of INR 337 - INR 340, on the back of a volume of 5.28 million shares so far. As the stock is in momentum, the next major hurdle that could act as a strong supply zone is present around INR 360.  

Hindustan Petroleum Corporation Limited

The last company on the list is Hindustan Petroleum Corporation Ltd (NS: HPCL ) and is the smallest among the three, with a market capitalization of INR 34,875 crores. The share price of HPCL jumped 3.88% to INR 255.4, surging to the highest level since 18 May 2022. The dividend yield of the stock is 5.7% and the next dividend payout is of INR 14 per share, the ex-date of which is on 22 August 2022.

Daily chart of HPCL with volume bars at the bottom

Image Description: Daily chart of HPCL with volume bars at the bottom

Image Source: Investing.com

The daily chart of HPCL is almost identical to the chart of BPCL, and it has also delivered a clear breakout with the next hurdle present around INR 267 - INR 270.  

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