FUTURES & OPTIONS

Ahead of the settlement week, ‘scare’ on Thursday and Friday has triggered nervousness among market players in the derivative segment. Huge sell-off towards the end of the week saw the index closing below the short term 21-DMA.

In the option segment, among Nifty Call options, the 10,100-strike call has the highest open interest and on put side 9,900-strike put has the highest open interest. Technically, if Nifty slides below the 9,900 level, expect sharp selling to pull the Nifty to 9,700 level sooner than expected. Bank Nifty witnessed slide of over 600 points and is placed at its 50-DMA support zone of 24,300. If this is broken expect Bank Nifty to fall further towards the 24,000 mark.

Amidst weakness in the broader market, Pharma stocks were star performers with stocks like Dr Reddy, Glenmark, Cipla and Lupin posting 5-12 per cent gains. Stay invested for present for further gains in near term.

Renewed buying was seen technology stocks. Buy on corrections TCS, Tech Mahindra and Wipro.

News driven activity was seen in Telecom and Tyre counters. Trai order over interconnect usage charges is expected to hasten the ‘death’ of weaker telecos.

Rally in tyre stocks on account of anti-dumping duty on truck and bus radial tyres that are imported from China was short lived. However, start accumulating at lower levels say observers. Metal stocks witnessed sharp selling at higher levels. Start nibbling at lower levels Tata Steel and Hindalco.

Stocks looking good are Cipla, Coal India, GAIL, IGL, Kajaria Ceramics, NBCC, Oil India, South India Bank, TechMahindra, TCS, Tata Motors and Wipro.