There are two sectors where going long seems a reasonable gamble. The PSU bank sector is perking up after a month of underperformance relative to the market. Going long in the September futures of biggies like SBI, BoB, Corp Bank, OBC and PNB seems a reasonable gamble.
| Stocks with highest change in Futures OI | ||
| Cos | % chng | 1-m futures price |
| Hindalco | 704.41 | 143.45 |
| Corporation Bank | 61.41 | 396.70 |
| M&M | 38.16 | 361.80 |
| Chambal Fertilisers | 33.03 | 36.95 |
| IVRCL Infrastructure | 31.44 | 842.25 |
| Neyveli Lignite | 28.91 | 84.20 |
| Divis Labs | 20.74 | 1517.15 |
| Wockhardt Pharma | 20.24 | 519.80 |
| Patni Computer | 18.92 | 438.50 |
| Chennai Petro | 16.34 | 236.30 |
The other sector is a disaster area where people seem to be speculating on policy change. The PSU refiners, especially BPCL and the Kochi refineries seem worth a play in the long September futures. HPCL and IOC may be worth a shot as well. The announcement of a further sell off in Maruti and of a possible sop to the auto sector may induce you to take a long position here.
| Stocks with highest change in prem/(disc)* | ||
| Cos | last week | previous week |
| HPCL | 2.11 | 8.45 |
| ONGC | 0.80 | 27.75 |
| ICICI Bank | -0.40 | 10.45 |
| Jaiprakash Hydro-Power | 0.25 | 0.35 |
| Grasim | -0.65 | 19.90 |
| BHEL | -4.79 | 19.05 |
| VSNL | 3.00 | 1.75 |
| Bharat Forge | 2.96 | 0.79 |
| National Aluminium | -1.05 | 2.35 |
| Maruti Udyog | -1.35 | 4.15 |
| * - prem/(disc) sorted as a % of cash prices | ||
Across the rest of the stock market, the best picks for bulls seem to be Bajaj Auto, Gujarat Ambuja and Tata Power. There seems also to be potential for a gain with a long NTPC future and there is just a chance that the entire Reliance group will jump inside the settlement.
The easing up of OI across the market has made it quite difficult to find options positions with a reasonable certainty about premium pricing. It's better to stick to the futures segment for another week at least.