Cummins is an interesting case - the stock priceline shows signs of technical weakness at 155 with 1.8 lakh shares traded across BSE and NSE combined. But there are substantial long call positions at 150c (OI: 22,800 premium:9), 155c (OI: 7,600 premium:8.9) and 160c (OI:40,000 premium:4.95).
This could be hedging, or the downtrend may be close to a reversal. Unfortunately you cannot build a bull-spread with long 150c versus short 160c at the last traded premiums. The 150c premium is likely to spurt.
| Stocks with highest change in Futures OI | ||
| Cos | % chng | 1-m futures price |
| IOC | 21.07 | 429.20 |
| Chennai Petro | 18.62 | 229.90 |
| M&M | 17.96 | 368.60 |
| Cummins India | 16.28 | 156.95 |
| ABB | 12.64 | 1806.20 |
| Kochi Refineries | 8.80 | 162.05 |
| Bank of India | 8.26 | 124.60 |
| Dr. Reddy's | 5.26 | 788.95 |
| Bharat Forge | 3.47 | 322.85 |
| J&K Bank | 2.78 | 459.95 |
Canara Bank is a better trade. The spot is at 236 with a bullish technical position in the stock and in the sector and nearly 7 lakh shares traded. In the options and futures segment, OI has increased substantially. It may be worth going long in Can Bank though it would be preferable to do this in the September futures rather than in the options segment.
Other bank stocks including SBI, HDFC Bank, ICICI, OBC and Corp Bank are all bullish and would be worth taking long futures positions. The Bank Nifty itself a natural "buy", given that the entire segment appears to be moving.
Auto stocks also seem to be moving as a group. Bajaj Auto and TVS also look like technical buys while Hero Honda is developing an interesting pattern with high OI and a reasonable technical position.
| Stocks with highest change in prem/(disc)* | ||
| Cos | last week | previous week |
| Tata Tea | 6.40 | 2.35 |
| Essar Oil | 0.30 | 0.45 |
| Punjab National Bank | 2.50 | 3.80 |
| Allahabad Bank | 0.00 | 0.90 |
| Gujarat Ambuja Cements | -0.04 | -0.20 |
| Tata Motors | -1.35 | -1.40 |
| LIC Housing Finance | 1.60 | 1.40 |
| Cadila Healthcare | 1.70 | 2.21 |
| IndusInd Bank | 0.50 | 0.80 |
| Bharat Forge | 1.75 | 2.96 |
| * - prem/(disc) sorted as a % of cash prices | ||
Mahindra & Mahindra and Maruti could also move up next week - M&M looks stronger than MUL on the basis of the recent split which has helped liquidity.
Among index majors, Ranbaxy and TCS appear to be under pressure. Both stocks may be "sells" in the futures segment at least though it's more difficult to suggest options positions in either.