FUTURES & OPTIONS

Mirroring the bullish undercurrent in the cash segment, derivative segment witnessed brisk trading during the week ended. On the options front, the maximum open interest in put options is at 10,600 strike and maximum open interest in call options at 11,000 strikes.

The Implied Volatility of calls closed at 10.78 per cent while that for put options closed at 11.21 per cent. The Nifty VIX for the week ended 6.43 per cent lower at 12.7 on weekly basis and is expected to remain sideways.

Trend analysis suggests, Nifty may trade in the range of 10,600 to 11,000 levels. The maximum upside levels to be watched for next week is 10,800- 850 levels, and a confirmation of reversal could open up a resumption of sharp weakness from the highs.

After long hibernation, Pharma stocks significantly outperformed other stocks during the week ended. Follow up buying support needed from hereon for sustainable rally, say industry observers. Buy on declines Sun Pharma, Cipla, Cadila and Aurobindo.

Metal stocks were back in demand. Post RBI policy meeting and the meet between finance minister and PSB heads, observers expect stability in PSU bank counters. The proposal on transferring NPAs of PSBs to special purpose vehicles is back on the agenda. Contrarians suggest buying in good PSU banks. Resilient and sustained demand on home front to trigger more turnarounds in the sector.

Demand for sick units signals the change in cycle. Buy Tata Steel and SAIL. Stocks looking good are Apollo Hospitals, Balkrishna Inds, Cipla, Chennai Petro, CG Power, Hero Motocorp, MGL, Muthoot Finance, SAIL and Sun Pharma.

( 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.)