FUTURES & OPTIONS

Ahead of the settlement week, derivative segment witnessed sharp bouts of volatility. Sentiment indicators like implied volatility, open interest, put/call ratio and VIX suggest further gains from current levels. Among Nifty Call options, the 10,000-strike call has the highest open interest of more than 69 lakh shares while on put side, 9,800-strike put has the highest open interest of over 67 lakh shares.

Market players expect the consolidation to continue in the coming week as July derivative contracts will expire on Thursday and traders will roll over their F&O positions to August series. They expect the expiry around 9,850-9,920 levels.

Decisive move above 9,950 levels could open up the next upside target of around 10,200 levels for Nifty, which could be achieved in the next 1-2 weeks. Led by ITC that cracked 13 per cent on a hike in cigarette cess, FMCG sector dragged the markets during the week ended. Contrarians suggest accumulation in ITC from current levels.

Renewed buying was seen in technology counters. Buy Wipro and HCL.

Modest buying was seen in bank stocks. Led by heavyweights, Bank Nifty Index outperformed Nifty index by 1 per cent. Punters expect Bank Nifty to cross 24,500 very soon. Stay invested in both PSU and private banks for present.

True to predictions, debt restructuring in infrastructure space has lent positive aura for the sector. Tread cautiously.

Helped by increase in import duty sugar counters rallied sweetly.

Expect similar rally in steel stocks say industry watchers. Stocks looking good are Bharat Forge, BEML, Container Corp, Hind Zinc, JP Associates, PFC, Srei Infra, Suzlon, Titan and Voltas.

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.