A couple of days back, I had indicated that a 'topping' pattern had emerged in Crude Oil and it is likely to fall . Crude Oil which touched a high of $135 on the day of the topping pattern, has since fallen to $128.
This should be good news for HPCL / BPCL and IOC. Another positive for these counters is the need for the government to find ways to find out how to subsidise Petrol and diesel. the govt is actively thinking of levying an additional cess (Oil cess) on the Tax collections. This should to some extent reduce the burden on the oil companies.
All this seems to be reflected on the prices and it may be assumed that the stock HPCL has made a bottom at Rs.230/-.
A break above Rs 254 with volumes would be a positive. Consider buying on a break above Rs 254 with stoploss kept at the recent low of Rs 230. Target should be in the vicinity of Rs 300-312/-
Happy Trading !
CA Rajiv D Khatlawala
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