FUTURES & OPTIONS

The derivative segment continued to witness brisk trading activity during the week ended. Sentiment indicators like implied volatility, put/ call ratio, open interest and VIX suggest a small correction in near term. According to option data, the highest OI concentration in put is at 10,000 strike while in calls 10,500 strike has the highest OI concentration.

Both Nifty and Bank Nifty indices witnessed addition of fresh short positions. Expect rangebound action in Nifty in the coming week within a high/low range of around 10,150-9,950.

Heightened stock specific action indicated in midcaps. After the success of the CPSE-ETF, which was an ETF of the 10 PSUs, the government has now come out with a 22 PSUs ETF called Bharat-22. With rupee touching a 30month high against the US dollar, IT, pharma and exporters were under immense pressure throughout the week.

Range-bound movement was seen in IT counters. Expect mild weakness on the back of strong rupee, say observers.

Dismal earnings triggered selling in pharma counters like Dr Reddy, Sun Pharma and Lupin. Aurobindo Pharma is likely to report better than expected results.

GST triggered auto sales provided impetus to the sector. Sales in July were a positive surprise as both passenger and commercial segment reported double-digit growth. Buy on declines Tata Motors, M&M and Hero Motocorp.

Important results to watch out would be SBI, BoB, Tata Steel, Tata Motors, Aurobindo Pharma, Eicher Motors, Sun Pharma, Hindalco, Cipla and BPCL.

Stocks looking good are ACC, Infibeam, Equitas Holdings, Jet Airways, Titan, KSCL, L&T Finance, Reliance Capital, Ujjivan Financial, Voltas.