F&O Alert: M&M, Shriram Finance see short buildup; Manappuram, Sun Tv long

F&O stock watch: Shares of Mahindra & Mahindra and Shriram Finance face up to 15 per cent downside risk; whereas, Manappuram Finance and Sun Tv can potentially gain up to 13 per cent.

F&O market outlook: As equity benchmark indices consolidated in the last couple of trading sessions, several stocks witnessed churning of positions in the futures & options (F&O) space on Thursday, with select stocks seeing fresh long buildup, some short buildup and few others long unwinding.

Here's a quick check on key stocks with notable long and short buildup alongside the Nifty and Bank Nifty.

Nifty

Current Level: 24,375

Support: 24,000

Resistance: 24,550; 24,600

The NSE Nifty 50 has seen a net 0.4 per cent decline in the last two trading sessions; whereas the open interest (OI) has dipped by 5.8 per cent. Thus implies long unwinding in the July series. FIIs in particular have reduced their net longs in overall index futures. 

The FIIs index futures long-short ratio dropped from 5.1:1 to 3.6:1 in the last two trading sessions.

Technically, the Nifty is seen testing resistance around its higher-end of Bollinger Bands on the weekly scale, at 24,375 levels. Breakout and close above the same would augur well for the NSE benchmark; wherein the index may stretch the up move towards 24,550 - 24,600 levels in the coming sessions.

On the flip side, a weekly close below 24,375 level, could lead to a continued phase of consolidation, with likelihood of the index testing support at 24,000-mark.

Bank Nifty

Current Level: 52,311

Support: 5,2,150

Resistance: 52,725

The Bank Nifty too has seen some long unwinding, with the index down 0.3 per cent in the last two days and OI witnessing a 15.5 per cent drop.

The Bank Nifty seems to be critically poised on the charts. On one hand, the Banking index is seen testing support around its 20-DMA (Daily Moving Average) at 52,150 levels, on the other it seems to be struggling to clear the hurdle at the higher-end of the Bollinger Bands on the weekly scale at 52,725 levels.

A clear breakout on either side is likely to set the trend on the Bank Nifty. 

F&O stocks with short buildup

Mahindra & Mahindra (M&M)

Current Price: Rs 2,702

Downside Risk: 15.4%

Support: Rs 2,630

Resistance: Rs 2,718; Rs 2,850

M&M stock declined 7.6 per cent in the last two trading sessions, while the OI has jumped by 24.6 per cent, implying short buildup at the counter. 

M&M is seen trading below the lower-end of the Bollinger Bands on the daily scale. The near-term bias is likely to remain tepid as long as the stock trades below Rs 2,718. On the downside, the stock has near support around its 50-DMA at Rs 2,630. Break and sustained trade below the same can trigger a steeper fall towards the 100-DMA at Rs 2,285 levels.

In case of a pullback, the stock is expected to face resistance around its 20-DMA at Rs 2,850. CLICK HERE FOR THE CHART

Shriram Finance

Current Price: Rs 2,830

Downside Risk: 11.3%

Support: Rs 2,735; Rs 2,700

Resistance: Rs 2,850

Shriram Finance July stock futures too has seen buildup of short positions in the last two days as the stock dipped 2 per cent alongside 13.4 per cent rise in OI.

In Friday's trade, Shriram Finance has bounced back after testing support around its super trend line at Rs 2,735. The stock, at present, is seen testing resistance around its 20-DMA at Rs 2,850. The stock needs to break and close above this level, for a short-covering rally to emerge. On the upside, the stock can spurt to Rs 3,000-mark.

On the downside, support at Rs 2,735 and Rs 2,700 holds the key. Break and sustained trade below the same can trigger a slide to Rs 2,590; Rs 2,510 levels. CLICK HERE FOR THE CHART

F&O stocks with long buildup

Manappuram Finance 

Current Price: Rs 215

Upside Potential: 13.5%

Support: Rs 213; Rs 203

Resistance: Rs 222; Rs 230; Rs 237

Manappuram Finance has gained 2.9 per cent since Tuesday, while the OI has risen by 9.5 per cent in the July series, thus implying buildup of long positions at the counter.

Manappuram Finance stock has been making higher highs and higher lows on the daily scale post the June 04 fall. The stock is also placed favourably on the price-to-moving averages action across time-frames.

The bias for the stock is expected to remain bullish as long as the stock holds above Rs 213. Stronger support for the stock exists at Rs 203 - its 20-DMA. CLICK HERE FOR THE CHART

On the upside, the stock can potentially rally to Rs 244; with interim resistance seen at Rs 222, Rs 230 and Rs 237.

Sun Tv

Current Price: Rs 806

Upside Potential: 9.9%

Support: Rs 775

Resistance: Rs 830; Rs 850

Sun Tv July contract has gained 2.2 per cent in the same period backed by a 17.5 Per cent rise in OI. 

Sun TV needs to trade consistently above Rs 810 for further gains to emerge. In case, the stock fails to hold the support, it can slip back towards its 20-DMA at Rs 775. CLICK HERE FOR THE CHART

On the positive front, sustained trade above Rs 810, can potentially trigger a rally towards Rs 880 levels, with interim resistance expected around Rs 830 and Rs 850.