RIL eyes new high; ONGC, HPCL can gain up to 8% amid windfall tax revision

The government on Thursday raised the windfall tax on exports of diesel to Rs 7 per litre and reintroduced the tax on jet fuel exports of Rs 2 per litre.

Shares of oil majors on Friday were trading in the red as the government raised the windfall tax on exports of diesel to Rs 7 per litre and reintroduced the tax on jet fuel exports of Rs 2 per litre, which was scrapped earlier in this month. 

Meanwhile, the Centre has reduced the windfall tax on domestically produced crude oil to Rs 13,000 a tonne from Rs 17,750 a tonne earlier, a move that will come as a relief for producers like ONGC and Vedanta Ltd. READ MORE

This is the third revision of the windfall tax regime since its introduction on July 1, 2022.

In trades so far on Friday, Bharat Petroleum Corporation (BPCL), Reliance Industries, Indian Oil Corporation and Hindustan Petroleum Corporation have declined up to 2 per cent. On the other hand, Oil & Natural Gas Corporation (ONGC) has moved 1 per cent higher in an otherwise weak market. The BSE Sensex was down around 500 points or 0.8 per cent to 59,800 and Nifty 50 fell 162 points or 0.80 per cent to 17,795 levels as of 12 noon.
 

Amid this development, here’s the technical outlook of related stocks:-

Nifty Oil and Gas Index (NIFTYOILGAS) 

Outlook: Breakout over 8,400
 

While the broader trend for the index indicates a consolidation phase, a sustained rally over 8,400 could trigger an upward rise, shows the daily chart texture. The index has a cushion at 8,000-mark and as long as the support is defended, the positive sentiment could see added interest. The next significant support stands at 7,713 level, which is its 200-day moving average (DMA). CLICK HERE FOR THE CHART

Oil & Natural Gas Corporation Ltd (ONGC)  

Likely target: Rs 247 

Upside potential: 8%

There is a positive divergence of the Relative Strength Index (RSI) which shows bullish strength in stock, exhibits the daily chart. In addition, the Moving Average Convergence Divergence (MACD) succeeded in rising over the zero line, symbolizing a positive underlying momentum. The price action shows an upward trend with support staying at Rs 128 level, its recent pullback mark. The 200-DMA situated at Rs 147 becomes the immediate hurdle. CLICK HERE FOR THE CHART

Reliance Industries Ltd (RELIANCE)

Likely target: Rs 2,900

Upside potential: 9%

When the windfall tax was introduced on July1, 2022 shares of Reliance Industries slipped 7 per cent lower on the same day. Thereafter, the stock managed to gain ground and made a strong comeback rising over the 200-DMA mark. The present chart texture displays an “Inverse Head and Shoulder” breakout, which looks to aim at a new historic peak of Rs 2,900 level. Support for the stock stays at Rs 2,500, which needs to be respected on a closing basis. CLICK HERE FOR THE CHART

Bharat Petroleum Corporation Ltd (BPCL)

Outlook: Hurdle at 200-DMA

The government-owned oil and gas explorer and producer struggled to conquer the 200-DMA mark placed at Rs 358 level. The RSI, the oscillator indicator has turned downward post entering the overbought territory, signalling persistent selling pressure at higher levels. The immediate support for the stock is seen at Rs 338, which is the 100-DMA and if the stock fails to find cushion around the same, the weakness could drag stock to Rs 321, its next support (50-DMA). CLICK HERE FOR THE CHART

Hindustan Petroleum Corporation Ltd (HINDPETRO)

Likely target: Rs 275 

Upside potential: 5%

After conquering the 50-DMA hurdle, the stock succeeded in crossing the 100-DMA at Rs 250 level. The trend hints at a similar move to test the 200-DMA placed at Rs 275 mark. The price action with “Higher High, Higher Low” formation denotes identical perspective, shows the daily chart. CLICK HERE FOR THE CHART