Informist, Monday, May 16, 2022

By Vaibhavi

MUMBAI – Traders added significant bullish bets in the futures and options of Eicher Motors after robust Jan-Mar results saw the automaker's shares surge 8%. 

The gains in the stock trapped call option writers, as the stock comfortably moved past the hurdle of 2,500 rupees. 

Positions, therefore, moved to higher strike prices, which sharply lifted premiums across the 2,600- to 2,800-rupee call options. This indicates that traders expect the stock to test these levels in the near term. 

Among put options, traders turned active at the 2,500-rupee strike price, as the contract garnered maximum open interest at that level, followed by the 2,400-rupee strike price.

Gains in the stock are expected to sustain only after a decisive breach of 2,700 rupees, as the level acts as an immediate resistance, said Sneha Seth, technical and derivatives analyst, Angel One. 

However, in case of profit booking, Seth expects support at around the 2,300- to 2,400-rupee mark.

In the May futures contract, open interest zoomed nearly 14% to 3.5 mln, indicating the addition of long positions. The stock ended 7.6% higher at 2,617.95 rupees.

Another stock that attracted investor interest was ACC Ltd. It shot up more than 8% after news of Adani Group acquiring the company and its parent Ambuja Cements from Holcim Group. 

Buoyed by the good valuation for ACC's shares, traders aggressively placed bullish bets in the derivatives segment.

Premiums across the 2,200-, 2,300- and 2,400-rupee strike prices surged, with strong addition of open interest. 

Due to this, the stock may touch 2,300 rupees in the near term, believes Parag Shah, technical and derivatives analyst, Edelweiss Financial Services expects. The level also acts as an immediate resistance.

The addition of long positions lifted open interest in the May futures of ACC by more than 23% to 2.9 mln. Today, the scrip ended with nearly 4% gains at 2,196.20 rupees.

On the sectoral front, the banking pack witnessed a rebound today, which helped the Nifty Bank index snap a two-day losing streak. It also supported the upmove in the Nifty 50. 

The gains in Nifty Bank were led by short covering, as indicated by a 10.4% fall in the open interest in the May futures contract of the index to nearly 3 mln.

Short covering is likely to continue in the near term, which can take the Nifty Bank index to 34000-34200 points, a technical and derivatives analyst said.

On the downside, the sectoral index can be seen drawing support at 33000 points, the analyst added. This was reaffirmed by put options data, wherein the 33000 strike price saw the maximum change in open interest.

Today, the Nifty Bank index closed 1.4% higher at 33597.60 points.

The Nifty 50 ended higher today supported by gains in frontline sectors such as banks, automobile and metal companies.

The index continues to be in an oversold zone, so analysts will watch closely if the index sustains above 15670 points, the low level it touched in early March. 

Strong support is seen at 15600-15700 points, while the upside is seen capped at 16000-16100 points, an analyst said. It will continue to consolidate between 15600-16100 points unless the Nifty 50 decisively breaches its resistance zone, the analyst added.

Today, the 50-stock Nifty 50 opened higher and moved between a high of 15977.95 points and a low of 15739.65 points before closing 0.4% higher at 15842.30 points.

--Nifty 50 May ended at 15865.00, up 78.40 points; 22.70-point premium to spot index

--Nifty 50 Jun ended at 15869.10, up 83.10 points; 26.80-point premium to spot index

--Nifty 50 Jul ended at 15892.00, up 67.15 points; 49.70-point premium to spot index

The total turnover in the futures and options segment of the National Stock Exchange was 67.9 trln rupees compared with 60.1 trln rupees on Friday.

The turnover in index options was 65.02 trln rupees compared with 61.4 trln rupees during the previous session. The total premium turnover of the index and stock options was 416.9 bln rupees compared with 469.5 bln rupees on Friday.

The most-actively traded underlying stocks were Ambuja Cements, State Bank of India, HDFC Bank, Reliance Industries, ICICI Bank, Bajaj Finance, Tata Steel, Infosys, Adani Enterprises and ACC Ltd.

End

Edited by Namrata Rao

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