Dixon, MCX, Divis Lab: Trading strategies in F&O stocks with high PCR

The PCR (Put Call Ratio) of these 3 stocks is above 1, implying presence of higher open positions in Puts as against Calls, shows the NSE options data.

Out of the 189 stocks trading in the futures & options segment, a handful of stocks such as Dixon Technologies, MCX India, Divi's Laboratories, IPCA Laboratories and Page Industries are seen trading with a PCR in excess of 1.

A PCR (Put Call Ratio) is derived by dividing the total number of open positions in Puts for a particular stock/ series as against the open interest (OI) in the Calls. A PCR above 1 implies that the particular stock or index has higher open bets in Puts versus Calls.

In the derivatives (F&O) segment, traders are allowed to take both bullish and bearish bets in the options market by buying or selling Puts and Calls. In general, a trader with a bullish bias will buy a Call or look to sell a Put option; and vice versa in case of a bearish trade.

 

Buying of Put and Call requires limited capital and implies limited risk to the amount invested. However, in case of a seller - also known as Put/ Call writer the margin requirement is higher; hence such traders are considered as stronger players.

Therefore, stocks with PCR could mean presence of stronger Put writers in the particular contract; hence the stock may either gain or fall less than others. Among the 5 above mentioned stocks, IPCA Labs and Page Industries are less active in the options segment.

Hence, here's a technical analysis on the other 3 stocks with high PCR - MCX India, Dixon Technologies and Divi's Labs:

Dixon Technologies

Current Price: Rs 15,370

Upside Potential: 5.4%

Support: Rs 14,800; Rs 14,400

Resistance: Rs 15,900

Dixon Technologies highest OI in Calls stands at Rs 16,000 Strike Price. The trading activity at the Strike Price indicates likely resistance for the stock around Rs 15,900 - Rs 16,200 range.

On the other hand, notable OI in Puts is visible at Rs 15,000, Rs 14,500 and Rs 14,000 Strike Prices. As per the options pricing, support for Dixon Technologies can be expected around Rs 14,800 to Rs 14,400 range.

On the charts, Dixon Technologies stock has zoomed 279 per cent post the super trend line breakout on the monthly chart in August 2023. The monthly chart suggests that the overall bias for the stock is likely to remain bullish as long as the stock holds above Rs 15,000-mark. CLICK HERE FOR THE CHART

MCX India

Current Price: Rs 6,500

Downside Risk: 8.5%

Support: Rs 6,070

Resistance: Rs 6,500

MCX India has been trading on a bullish note for the fifth straight month. The stock has zoomed 129 per cent from its June low of Rs 2,875 to a high of Rs 6,590 this October. Technical chart suggests that the bias for the stock is likely to remain favourable as long as the stock holds above Rs 6,070 levels. CLICK HERE FOR THE CHART

Meanwhile, the daily and weekly chart shows presence of some resistance around Rs 6,500 levels. Thus, the stock may consolidate in the near-term. Further, the options data shows presence of high OI in Calls at the Rs 6,500 Strike Price. On the other hand, highest OI in Puts is seen at Rs 5,000 Strike - thus leaving enough room for the stock to consolidate.

In case, the stock fails to sustain above Rs 6,500, it could witness a dip towards Rs 5,950 - Rs 6,000-mark; with interim support seen at Rs 6,200 levels.

Divi's Laboratories

Current Price: Rs 6,082

Upside Potential: 4.2%

Support: Rs 5,925; Rs 5,800; Rs 5,620

Resistance: Rs 6,340

Divi's Lab highest OI in Calls stands at Rs 6,300 Strike, implying likely resistance around Rs 6,340 levels. On the other hand, the stock has significant OI spread across Puts at Rs 6,000 followed by Rs 5,800, Rs 5,700 and Rs 5,500. This shows keen buying interest at the counter at lower levels. 

Based on the existing trading activity in the Puts, support for Divi's Lab can be expected around Rs 5,925 and Rs 5,800 levels.

Technical chart shows that Divi's Lab has been trading with a positive bias for the seventh straight month, and the stock has gained 82 per cent during this period. The long-term bias is likely to remain bullish as long as the stock holds above Rs 5,620 levels. CLICK HERE FOR THE CHART