Bullish scenario for OMCs: Sanjeev Agarwal

Sanjeev Agarwal, Director, Dynamix Research and Capital Management in a conversation with ET Now talks about OMCs.

What is your call on particular stocks especially OMCs? We did have the like of a Goldman Sachs really upgrading those counters last week but we have seen a 2% cut now. What is your take?

If you see the oil marketing companies they have been forming a very strong rounding bottom for the last 2-3 months. This rounding bottom is basically an indication of a sort of accumulation and after that these shares are trading above their respective 100 and 200 DMAs and more importantly all the moving averages are below price so definitely it is a bullish kind of a scenario.

It may have been aided by the fact that these reforms were expected for a long time and these reforms are going to help these oil marketing companies to avoid all these marketing losses they have been doing on these subsidised fuel though cooking gas, LPG and kerosene still form a big junk of these subsidies but I think the burden on these oil marketing companies will be lessen to quite an extent and it is showing in the charts.