Oil India, ONGC shares hit 52-week highs; here's why

Shares of Oil India Ltd and Oil and Natural Gas Corporation Ltd (ONGC) surged sharply in Wednesday's trade, touching their respective one-year high levels. Oil India rallied 9.67 per cent to Rs 492, while ONGC climbed 7.26 per cent to Rs 266.05.

The sharp upmove followed investor optimism around the potential benefits of the recently concluded India–European Union (EU) trade agreement. Some other stocks in the segment also posted notable gains during the session.

"Petroleum and petroleum products will have a greater export-import opportunity in India-EU deal. In addition, crude prices are up and ONGC and Oil India could have a windfall benefit," Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, told Business Today.

Sharing a technical perspective for Oil India's counter, AR Ramachandran, part-time Sebi-registered research analyst at Tips2trades, noted, "The stock is bullish and also overbought on daily charts with next resistance at Rs 515. Investors should be booking profits at current levels as a daily close below the support of Rs 454 could lead to a downward target of Rs 406 in the near term."

At present, shares of both Oil India and ONGC are trading above their 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day simple moving averages (SMAs).

India and the EU recently concluded negotiations on the trade agreement, with Prime Minister Narendra Modi and European Commission President Ursula von der Leyen formally sealing the pact.