Equity Futures: HAL hits record high, options hint at more gains

Informist, Monday, Sep 12, 2022


By Vaibhavi


NEW DELHI – The derivatives segment of Hindustan Aeronautics saw a flood of bullish bets today as the government's push for procurement of defence equipment made locally and the company's investor outreach programme lifted sentiment for the stock.


Shares of the state-owned company rose over 8% in the cash market and tested a lifetime high of 2,638.35 rupees. This prompted traders to unwind their positions at lower strike price call options on hopes of further gains in the scrip.


Fresh positions were aggressively added across higher strike price call options of 2,620-2,740-rupees, which saw the premiums for these contracts skyrocket.


Sentiment for defence stocks has also been largely positive on the back of their strong order books and the government's push for indigenisation of defence equipment. Hindustan Aeronautics has been on a northbound journey for 12 straight sessions, having notched nearly 18% gains.


The upbeat sentiment for the stock is likely to push it higher towards 2,800-3,000-rupee levels in the near future, said Ratnesh Goyal, senior technical and derivatives analyst at Arihant Capital Markets.


Foreseeing strong returns, Goyal suggests investors hold on to their positions in the stock and use any intraday fall towards 2,550-rupee levels to initiate fresh bets.


The bullish sentiment for the stock translated into 15.6% jump in open interest in its September futures contract, which indicates addition of long positions.


The stock ended 7.5% higher at 2,631 rupees.


Meanwhile, the Nifty 50 ended above 17900 points, owing to positive global cues and strong gains in Reliance Industries and frontline information technology stocks.


However, the index struggled to stay above 17950 points. In the cash market, the Nifty 50 ended 0.6% higher at 17936.35 points after it tested a high of 17980.55 points.


Positioning within the call options of the index suggests it is poised to face stiff resistance around 18000 points. The Nifty 50 last tested that level on Apr 5.


Call options of 18000 strike price expiring Sep 15 also held the highest open interest.


A sustained close above 18000 points on a weekly basis will remain imperative to trigger fresh bullish momentum for Nifty 50, said Viraj Vyas, technical and derivatives analyst at Ashika Institutional Research.


–Nifty 50 Sep closed at 17953.40, up 86.95 points; 17.05-point premium to spot index

–Nifty 50 Oct closed at 18007.00, up 89.55 points; 70.65-point premium to spot index

–Nifty 50 Nov closed at 18067.00, up 89.90 points; 130.65-point premium to spot index


Total turnover in the futures and options segment of the National Stock Exchange was 66.03 trln rupees, down from 69.7 trln rupees on Friday.


Turnover in index options was 62.84 trln rupees compared with 66.02 trln rupees Friday. The total premium turnover of the index and stock options was 342.45 bln rupees compared with 417.08 bln rupees in the previous session.


ICICI Bank, Axis Bank, ACC, Hindustan Aeronautics, Zee Entertainment Enterprises, HDFC Bank, Adani Ports and Special Economic Zone, Reliance Industries, Adani Enterprises, and Infosys were among the most-actively traded underlying stocks today.  End


Edited by Ashish Shirke


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