Buy, Avoid or Hold? Analyst gives recommendations on ONGC, IOC, Gujarat Gas

With the Nifty50 trading with a positive bias on Tuesday, up 0.3 per cent at 17,748.35, Nifty Oil & Gas index was the biggest gainer among the sectoral indices. Globally, the oil and gas stocks have been gaining amid OPEC’s decision to maintain supply restraints.  

Oil prices climbed on Tuesday, hitting their highest levels in at least three years, extending gains triggered during the previous session after the world’s major oil producers announced they had decided to keep a cap on crude supplies, Reuters reported. 

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The Nifty Oil & Gas index was up almost 2 per cent around 1:40 pm and was trading at 7980. In the 15-share index, 12 stocks advanced around this time while the reaming three were on a decline. The biggest gainers were Oil & Natural Gas Commission (ONGC), Mangalore Refinery and Petrochemicals Limited (MRPL) and Hindustan Petroleum Corporation Limited (HPCL) which gained over 9 per cent, 5.5 per cent and 3.3 per cent respectively. 

Gujarat Gas Limited was up 3.3 per cent. It was followed by Indian Oil Corporation Limited (IOC), Gail India Limited and Bharat Petroleum Corporation Limited (BPCL). The stocks gained 3.13 per cent, 2.10 per cent and 1.67 per cent respectively. 

The losers were Petronet LNG Limited, Mahanagar Gas Limited (MGL), and Castrol India Limited, which were down 1.4 per cent, 0.3 per cent and 0.11 per cent respectively. 

Also Read: Castrol India to piggyback on lubrication industry growth, says HDFC Securities; recommends buy 

Technical Analyst Nilesh Jain is bullish on the oil and gas stocks. He recommends two stocks on Tuesday with a short-term view.   

He recommends investors to hold on to ONGC stocks at current levels expecting a 10 per cent upside from the current levels. The stock was trading around RS 160.   

He also gives a buy recommendation on IOC with a target price of 140-Rs 145 with a stop loss at Rs 124. This stock was trading at Rs 130.30 on the NSE around this time. 

Also Read: As gas prices see a sharp spike, watch out for these Oil & Gas stocks – experts give sector outlook

He advises against making any fresh positions in Gujarat Gas at current levels, saying that the stock has moved considerably up on the intraday basis and the risk-to-reward ratio is not favourable at current levels.