How to trade RIL, ONGC, Oil India post cut in windall tax? Find out

While the underneath trend seems positive, Reliance, ONGC and Oil India need to sustain above the major support levels for further gains.

Shares of Reliance Industries, ONGC and Oil India were in the limelight on Wednesday after the government cut windfall tax on domestic crude oil production from Rs 23,250/ tonne to Rs 17,000/ tonne. The government also reduced additional excise duty on exports of diesel and ATF by Rs 2/litre and additional excise duty on petrol has also been removed.
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On July 01, when the government annoucned the windfall tax levy, Reliance Industries recorded its biggest fall of the year 2022. The stock tumbled over 7 per cent. Similarly, ONGC and Oil India plunged 13 per cent and 15 per cent, respectively on that day.

Now, as the windfall tax is partly repealed, all the three stocks opened gap-up on Wednesday. Here’s a technical outlook on the likely road ahead:-

Reliance Industries Ltd (RELIANCE)

Outlook: Breakout above 200-DMA needs to be sustained

Reliance Industries shares opened gap-up over the 200-day moving average (DMA) set at Rs 2,507-mark. If the stock manages to hold ground above the same, a positive upside can be expected as the stock has held support near the Rs 2,350 level earlier. A bullish bias could see this stock rally towards Rs 2,700 level, shows the daily chart. CLICK HERE FOR THE CHART

Oil & Natural Gas Corporation Ltd (ONGC) 

Outlook: Needs to hold Rs 134

While there is a breakdown of “Death Cross”, on the daily chart, which signifies bearishness, the positive crossover of MACD may negate the negative downside. This may come true, if the stock firmly holds ground over the horizontal hurdle of Rs 134-mark. The counter may rally to Rs 145 level, its 50-DMA barrier. CLICK HERE FOR THE CHART

Oil India Limited (OIL)

Outlook: May rally to Rs 220

As long as the stock defends its December low of Rs 160, the bullish bias may stay afloat for a medium-term outlook. The broader trend appears to be headed to Rs 220-mark, which remains the major resistance, shows the weekly set-up. Immediate bias exhibits Rs 190 as a closing basis support.  CLICK HERE FOR THE CHART