What the Num­bers Say

The Economic Times - - Smart - Ram Sah­gal & De­vangi Gandhi

Feb 1, 2016 Mum­bai | ET In­tel­li­gence Group: Bank of Bar­oda (BoB), which tanked al­most 11% on Mon­day, could fall even more in the short term as deriva­tives traders piled up bear­ish bets af­ter a dis­ap­point­ing Q3 show.

Open in­ter­est (OI) of the stock fu­tures ex­pir­ing Fe­bru­ary 23 jumped 25% as the shares tum­bled, in­di­cat­ing heavy short­ing. On the op­tions front, OI put-call ra­tio fell to 0.37 from 0.76 on Fri­day. This in­di­cates that BoB 50 DMA 100 DMA 200 DMA Feb 13, 2017 post re­sults, traders are un­com­fort­able sell­ing put op­tions (for ev­ery 100 calls sold, only 37 puts were sold on Mon­day, down from 76 a ses­sion ear- lier) for fear of the stock fall­ing more and have in­stead sold more call op­tions in the be­lief that up­side move­ment is capped in the short term.

Tech­ni­cals show that the stock has strong sup­port at ₹ 155-157, or around 8% lower than Mon­day’s clos­ing of ₹ 168. The Mon­day’s short build up hap­pened at an av­er­age price of ₹ 173.6. This means a bounce to­wards that level could re­sult in cre­ation of fresh shorts for a pos­si­ble tar­get of ₹ 159-160 be­fore Fe­bru­ary 23, feels Manoj Vyalar, deriva­tives an­a­lyst, Reli­gare Se­cu­ri­ties.

BoB stock has moved in a chan­nel since past one year

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