FUTURES & OPTIONS

Mirroring the bullish undercurrent in cash market, derivative segment witnessed robust volumes. However, the breadth, indicating the overall health of the market, was weak.

Nifty Futures managed to reclaim 10,800 levels that was last seen in February 2018. True to predictions, short covering fueled the rally in Bank Nifty Futures propelling it to close at 26,413 up 2.7 per cent. Expectedly private banks solely aided the outperformance. PSU banks continued to be laggards.

On the options front, the maximum open interest in put is at 10,500 strike and maximum open interest in call at 11,000 strike.

Techies indicate 10,70010,750 spot levels as strong support zone; and current trend is likely to continue towards 10,900- 10,950. On the back of favourable cyclical trends in metals, metal stocks were back in demand. Buy on lows JSPL, Tata Steel, Hindalco and JSW Steel.

Sentiment for bank stocks improved after better than expected results from private banks like ICICI Bank, HDFC Bank and Kotak Bank. Sharp provisions have kept PSU Banks on weak wicket. Contrarians suggest bottom fishing in select PSU counters.

Pharmaceutical stocks could react on Monday following Trump’s announcements regarding the drug policy, Trump blueprint to lower drug prices, called “American Patients First,” weren’t as biting as his words suggested. Expect a strong relief rally in Pharma stocks.

Charts suggest buying in Arvind, Adani Ports, BPCL, Container Corp, HDFC Bank and Engineers India; and selling in Federal Bank, Cholamandalam Finance, Sun Pharma, Siemens and Titan Inds.