FUTURES & OPTIONS

Derivative segment witnessed brisk and volatile trading during the week ended. Nifty Futures closed higher for the ninth consecutive week. In the options segment, the highest open interest was seen at the 11800- strike call option and 11600- strike put option. The PCR OI for the week closed at 1.12 which indicates OTM put writing.

Led by PSU banks, Bank Nifty gained 227 points closing at 28,062. Even as private banks like YES Bank and InduSind Bank were on weak wicket; select PSU Banks like BOB, PNB and others witnessed buying. With the Centre looking to make resolution of NPAs a political issue, industry watchers expect fast track solution to the issue. Contrarians can use sharp corrections to buy PSU banks for good long term gains.

After the challenging times of 2012- 16, depreciation of rupee coupled with revival in BFSI segment gave impetus to IT companies. The movement of rupee will directly help IT companies enjoy higher margins. Stay invested in biggies like TCS, Infosys and Wipro; and look for opportunities in midcaps.

August auto sales show case divergent trends. M& M, Ashok Leyland and Tata Motors reported 14%, 27% and 27% growth in sales. Buy TVS Motors and Ashok Leyland for unexpected returns.

True to predictions several pharma stocks ended the week on a very strong note. Dr Reddy, Lupin, Sun Pharma and Cipla look good for gains from current levels.

From the PSU space, National Alumini- um and NMDC look good.

Looking good for short term are Apollo Hospitals, Bharat Forge, BOB, Godrej Inds, KPIT, L& T, Lupin, Petronet LNG.