Resistance for Nifty seen at 17,725; Stocks to buy in September F&O series

Coal India, City Union Bank, Cummins, IDFC First Bank and Piramal Enterprises are the five F&O stocks tha can deliver up to 21 per cent returns in the September series.

So far in the August expiry, the Nifty futures contract moved broadly in a 1,000-point range, having rallied from a low near 17,000-mark to a high of 18,000.

As of Wednesday the penultimate day for the monthly expiry, Nifty futures witnessed notable rollover of around 40 lakh contracts to the September series in the last two trading sessions.

Meanwhile, as of 11:45 AM, here's what the options data indicate for Nifty on the expiry day:

There seems to be an intense fight between the bulls and the bears at 17,700 Strike Price.

According to the data available on the NSE website, the Nifty 17,000 Call option has seen heavy addition of 1.94 lakh contracts in Open Interest (OI), followed by addition of over 1 lakh contract each at the 17,750 17,800, Strikes.

On the other hand, the 17,700, 17,650 and 17,600 Puts too seen addition of around 95,000 contracts at each of the Strike Prices.

Based on the current options data, it seems that the Nifty 50 is likely to find it difficult to overcome the day's high so far at 17,725. Whereas on the downside, the Nifty may test support closer to 17,600 level on Thursday.

Meanwhile, going into the September series here are the top five F&O stocks that can generate potential healthy returns.

Coal India Ltd (COALINDIA)

Likely target: Rs 250

Upside potential: 10.5%

The state-owned coal and refining company has soared 63 per cent so far in the current year and has logged highest yearly gains since its the debut in 2010. The immediate breakout of a “Flag pattern” suggests fresh up move that might see the stock rally to a new all-time high of Rs 250. On the downside, the stock has a cushion at Rs 214 level.  CLICK HERE FOR THE CHART

City Union Bank Ltd (CUB)

Likely target: Rs 200 and Rs 225

Upside potential: 9% to 21%

Shares of City Union Bank broke-out of the tredline resistance on the monthly chart, backed by fresh strength and momentum. The stock indicates further upside in coming sessions with a rally anticipated to the extent of Rs 200 to Rs 225 levels, shows the monthly chart.

Further, the Moving Average Convergence Divergence (MACD) too has formed a positive crossover beneath the zero line, reflecting a build-up of a bullish bias. Support for the stock exists at Rs 170 mark. CLICK HERE FOR THE CHART

Cummins India Ltd (CUMMINSIND)

Likely target: Rs 1,300

Upside potential: 7%

While one could see a negative divergence of Relative Strength Index (RSI) on the daily chart of Cummins India, the price initiative is resilient to see any sell-off and continues to scale higher levels. The chart structure denotes intention of logging fresh historic peak around Rs 1,300. Support for the stock is seen around Rs 1,150 mark, where it has seen accumulation in the recent decline. CLICK HERE FOR THE CHART

IDFC First Bank Ltd (IDFCFIRSTB)

Likely target: Rs 55

Upside potential: 12%

A clear trendline breakout on the monthly chart suggests a positive rally for the stock in the September series. The price action reflects a move that can topple Rs 55, which is the next major hurdle. The cushion for the stock is seen at Rs 46 and Rs 42 levels. CLICK HERE FOR THE CHART

Piramal Enterprises Ltd (PEL)

Likely target: Rs 2,200

Upside potential: 8%

A cup and handle breakout indicates a rally to Rs 2,200 level, its 50-weekly moving average (WMA) mark that stock failed to overturn since February, according to the weekly chart. MACD, the momentum indicator converged positively under the zero-line, which signifies a positive momentum. The support for the stock exists around Rs 1,900 and Rs 1,850 levels. CLICK HERE FOR THE CHART