FUTURES & OPTIONS

Ahead of settlement week, the derivative segment witnessed brisk trading during the week ended. Nifty Futures witnessed a sideways consolidation, inching marginally higher for the fifth week. Nifty moved in a tight range of ~1.4 per cent, ending 0.21 per cent higher at 10,837.

Bank Nifty futures relatively outperformed ending 1.44 per cent higher at 26,791. On the options front, the maximum open interest in put options is at 10,700 strike and maximum open interest in call options at 11,000 strikes.

The PCR OI for the week closed up at 1.15 which indicates OTM put writing. Analysis suggests 10,700-10,750 spot levels is strong support zone and current trend is likely to continue towards 10,90010,950. The maximum upside levels to be watched for next week is 10,950-10,975 levels, and a confirmation of reversal could open up a resumption of sharp weakness from the highs. Track rollovers for spotting winners of July series.

True to prediction, Pharma stocks continued to attract good follow up buying support. Buy on declines Dr Reddy, Divi Labs, Natco, Sun Pharma, Cipla, Cadila and Aurobindo.

The long addition of 8 per cent in the open interest was seen in BankNifty. Techies say the index has given a bullish symmetrical triangle pattern breakout on daily chart. Expect 27,000 target, say punters. Sustained buying was seen in ICICI Bank and HDFC Bank.

On the back of Opec move to boost oil supply, short term rally indicated in oil marketing firms. However, avoid fresh buying for present and book profits on bulges. Stocks looking good are Bajaj Auto, Cipla, Dabur, Godrej Inds, HDFC, LIC Housing, M&M and Tata Motors.