Web exclusive: Trends and strategies in the F&O segment

Check out the trends and strategies for select stocks with Nandish Patel, Derivative Analyst at Sharekhan

Check out the trends and strategies for select stocks such as McDowell, Reliance Comm, Indiabulls Real Estate, JP Associates and Tata Global with Nandish Patel, Derivative Analyst at Sharekhan:

Smartinvestor : Markets seem to have taken a breather today ahead of RBI policy meet today. The Nifty has retreated and is hovering near 5,840 levels in late noon trades. What is your call on the Nifty options for the week ahead?

Nandish Patel : We have seen that the level of 6000 is acting as a stiff hurdle from where one side selling was seen in the market. This time the premium has widen significantly due to the expensive cost of funding but we haven’t seen good addition in open interest on the future side. Interestingly after expiry 5900 call & put both has seen good addition followed by other strikes. As tomorrow is the monetary policy, I feel the market would remain volatile but overall setup looks weak & I think one can form bear put spread of 5800 & 5700 strike with a spread ratio of 27.

Smartinvestor : McDowell (United Spirits) seems to be active in the options segment today with contracts at strike prices between Rs 2,500-2,700. What is the OI concentration suggesting and what strategy can one adopt for AUG options expiry?

Nandish Patel : After huge consolidation at the higher range of 2650-2750 the stock has given a break out on lower side with a good addition on the short side. Overall setup looks extremely weak & I feel the stock will head towards 2450-2350 levels on lower side. At the current market price of 2600 one can sell with a SL of 2650 & targets of 2550-2500 for 1 or 2 days.

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