Concor, Dixon: Trading strategies for stocks with high long buildup in F&O

F&O stock update for May expiry: Page Industries, Concor, Dixon, Metropolis, Crompton Greaves and Zydus Life have seen notable long buildup in recent days. Here's a short-term outlook on the stocks.

With the Nifty 50 logging back-to-back gains in the last few trading sessions several stocks too have managed to register decent gains on the NSE.

The Nifty May futures gained 0.9 per cent in the last four trading sessions, while the overall open interest (OI) dipped 3.8 per cent, mainly on account of some short-covering by FIIs. The FIIs net long-short ratio which stood at 27 per cent four days back, now stands at near about 31 per cent; which shows that the foreign investor still hold sizeable shorts in index futures for the May expiry.

Among stock futures, out of 185 stocks traded in the futures & options (F&O) segment as many as 123 stocks logged net gains in the last four days. More importantly, 23 stocks saw a rise in open interest (OI), of which 8 stocks futures also registered a corresponding increase in the OI.

In general, rise in price accompanied with an increase in OI indicates build-up of fresh long positions.

Page Industries saw a 32.5 per cent jump in Open interest, with 0.5 per cent net gain over the last four days. Whereas stocks like, Metropolis Healthcare, Zydus Lifesciences, Crompton Greaves Consumer Electricals, Container Corporation of India (Concor) and Dixon Technologies OI rose by 8-14 per cent, with a corresponding 4-15 per cent surge in the underlying price.

Metropolis Healthcare, however, is in the F&O ban period on Thursday, thus fresh positions will not be allowed in this contract.

Meanwhile, here's a technical outlook on the other F&O stocks with long build-up.

Page Industries

Last close: Rs 36,325

Upside potential: 5.2%

Support: Rs 35,140; Rs 35,070; Rs 34,800

Resistance: Rs 36,900; Rs 37,370

Page Industries is thinly traded in the F&O segment. The options data suggests potential upside up to Rs 38,300 levels, with interim resistance seen at Rs 36,900 levels. On the downside, Page Industries stock can expect considerable support around Rs 34,200 levels.

Technically, Page Industries stock has closed above the 100-DMA (Daily Moving Average) after more than a month. The price-to-moving averages action is neutral, with the stock trading below the long-term averages, and the 20-DMA above the 50-DMA.

The 20- and 50-DMAs at Rs 35,140 and Rs 35,070 are likely to act as support, while the stock may spurt towards the 200-DMA at Rs 37,370 levels on the upside.

Zydus Lifesciences

Last close: Rs 1,081

Upside potential: 11%

Support: Rs 1,050; Rs 1,000

Resistance: Rs 1,170

Zydus Lifesciences stock has risen by 7 per cent in the last four days accompanied with a 14.4 per cent surge in the OI. The stock's PCR (Put Call Ratio) stands at 0.5 per cent. The Rs 1,200 Strike Price has the highest OI among Calls followed by Rs 1,100. Highest OI in Puts is seen at Rs 1,000 followed by Rs 1,100.

The presence of high OI, both in Calls and Puts at the Rs 1,100 Strike suggests likely tussle between the bulls and the bears around this level. 

Technically, Zydus Life stock is trading with a favourable bias on the daily scale. The stock witnessed a gap-up trade, with suggests that the near-term bias is likely to remain positive as long as the stock sustains above Rs 1,050 levels. The key momentum oscillators are also in favour of an upside, hence the stock may attempt to retest its recent high around Rs 1,170 or hit the Rs 1,200 mark.

Crompton Greaves Consumer Electricals

Last close: Rs 389

Upside potential: 10.5%

Support: Rs 375

Resistance: Rs 405; Rs 410

Crompton Greaves Consumer Electricals stock has rallied nearly 15 per cent in the last four day, with OI seeing an 11 per cent jump. The PCR stands at 1.05, with highest OI in Puts seen at Rs 350 followed by Rs 380. Highest OI in Calls is seen at Rs 400 followed by Rs 430.

The options trading activity suggests support for the Crompton Greaves stock at Rs 375, and resistance at Rs 405, above which the stock can potentially rally to Rs 430 levels.

Technically, too, the weekly chart suggests that the bias is likely to remain positive as long as the stock sustains above Rs 375 level. On the upside, the stock may face resistance around its recent high at Rs 410.

Container Corporation of India (Concor) 

Last close: Rs 1,082

Upside Potential: 10.9%

Support: Rs 1,030; Rs 1,000

Resistance: Rs 1,120

Container Corporation of India (Concor) stock logged a net gain of 4 per cent in the last four days, and its OI rose by 10 per cent. The PCR stands at 0.6 per cent, suggesting presence of higher OI in Calls for the stock.

The options price action data indicates near resistance at Rs 1,120, above which a rally to Rs 1,200 seems possible. On the downside, highest OI in Puts is seen at Rs 1,000 Strike Price, indicating support around that level.

Technically, Concor stock is seen trading in a rising channel on the weekly scale. The stock at present seems to be trading near the higher-end of the anticipated trading band, thus suggesting resistance around Rs 1,120 levels. Breakout above the same can trigger fresh momentum. On the flip side, the stock may consolidate and test Rs 1,030 levels on the downside.

Dixon Technologies

Last close: Rs 9,290

Upside Potential: 7.6%

Support: Rs 9,120; Rs 8,940

Resistance: Rs 9,500

Dixon Technologies has logged steady gains in each of the last four trading sessions, and was up 12.1 per cent backed by an 8.1 per cent rise in the OI during this period. The PCR stands at 1.04 per cent, indicating likely support for the stock in case of dips.

Highest OI among Puts is seen at Rs 9,000, Rs 8,500 and Rs 8,700 Strike Prices. Whereas, in case of Calls, high OI is visible in Rs 9,400 and Rs 9,500 Strikes. The option trading activity suggests that breakout above Rs 9,600, can trigger a rally towards Rs 10,000-mark.

Technically, Dixon Technologies stock is trading in overbought zone on the daily and weekly time-frame. The DI (Directional Index), however, indicates that the existing trend is fairly strong. Hence, any dips at the counter are likely to witness a strong buying reaction.

Charts suggest presence of support around Rs 9,120 and Rs 8,940 levels. On the upside, sustained trade above Rs 9,270 levels shall augur well for the stock. In the interim, the stock may face resistance around its recent high at Rs 9,500 levels.