Contracts in technology stocks may be in for a pullback this week as they have been beaten down heavily and there seems to be no scope for further short build ups.
MUMBAI: Contracts in technology stocks may be in for a pullback this week as they have been beaten down heavily and there seems to be no scope for further short build ups.
Stock-specific action is expected to continue in the stock futures, while index futures are expected to touch 4370- 4380 before expiry.
The market is expected to remain firm during the week. Rollovers on Nifty futures were seen at 21% on Friday, which is quite good. Overall, the market expects rollovers to be in the range of 80-85% during this expiry.
During the week ended April 24, the Nifty May futures closed at 4260, a premium of 12 points to the spot. The open interest stood at 2.77 crore, up from 2.39 crore at the end of the previous week. Over 5.5 lakh contracts were traded on Friday, indicating increased trader participation.
While the first three trading session of the week witnessed heavy build up in open interest positions, the last two days saw bulls rallying and most of the shorts getting covered.
Another trend witnessed during the week was the entry of arbitrageurs. As the cash market witnessed profit booking in the Reliance and banking stocks, traders used the opportunity to buy in the cash market and sell in the futures segment, making cool margins in the process.
Some of the new stocks which got included in the F&O list recently like Aban Lloyd witnessed heavy long build ups during the week.
The top five traded single-stock derivative contracts last week were Reliance, Infosys, Suzlon, Reliance Communication, and SBI. Suzlon replaced Reliance Capital from the list of top five traded single-stock futures last week from the week before last. The movements in open interest, prices and basis differential to the underlying for the top-traded stock futures contracts for last week are given below.
Reliance May stock futures closed with a Rs 40 gain week-on-week at Rs 1,736, at premium of 5 basis to the spot. In the previous week, the contract had closed at Rs 1,697. Open interest was at 55.97 lakh Infosys May futures dipped during the week to Rs 1,989 from the previous week’s close of 1998.35. The stock future has been beaten down quite a bit and traders expect it to go up by Rs 60-70 as the stock has no room for any more short build ups. Open interest was seen at 47.22 lakh, a drop of 9% on Friday.
Suzlon Energy, which had closed at Rs 1144 last week, jumped to Rs 1362. On Friday alone it jumped by 17% on the news of its success in the race for RePower.
The open interest saw a 5% rise at 16.8 lakh on Friday.
Reliance Communication May futures moved up last week’s close of Rs 497.30 to Rs 507. The contract saw a open interest build up of 1.33 crore.
SBI futures dropped to Rs 1302 from its week ago price of Rs 1,330. The contract witnessed heavy profit booking in the mid week and the open interest stood at 59 lakh.
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