FUTURES & OPTIONS

Following the uncertainty in cash market, derivative segment witnessed downward momentum. Fresh short positions were seen in Nifty Futures. Both Nifty and Bank Nifty ended the week in red, shedding nearly 2 per cent each.

In the option segment highest O.I. for Nifty in the current series is placed at 11,000 call option and in 10,500 put option.

For Bank Nifty Futures the highest open interest is placed at 26,500 call option and 25,000 put option. Techies indicate that the head and shoulder pattern in the indices suggests further short term weakness.

Barring FMCG sector, nearly all the sectoral indices closed in red.

In the banking sector all eyes are on SBI, which will report earnings on coming Tuesday. Tweets from the in-charge FM Piyush Goyal regarding recapitalization and restructuring of PSU banks have raised hopes. Avoid PSU banks for present and stick to private banks, say observers.

Weak rupee prompted buying in tech stocks. Buy TechM, TCS and Infosys.

Churning in the power sector with several UMPPs being shut down or put on block for sale reflects the distress in the sector. Stay away from the sector. Resolution of Bhushan Steel (Bid of Tata Steel accepted) has raised hopes of similar solutions for other debt ridden companies having “value”. Watch out for action in this segment.

Renewed selling was seen in Autos and Capital Goods counters. Use weakness to buy Tata Motors and Voltas with medium term view. Charts suggest buying in Dabur, Granules, HUL, Kotak Bank, TechM and YES Bank; and selling in Cipla, Godrej Inds, Maruti Suzuki, TVS Motors and UPL. (C. Kutumba Rao is an avid follower of stock markets. This newspaper is not liable for decisions made on the basis of this column. Views expressed in the article are personal views of the writer.)