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No respite for Call writers in Metal stocks
Commentary:
In the recent leg of the Nifty recovery, metal stocks remained in focus while leaders like Tata Steel, JSW Steel and Hindalco saw decent buying. Ahead of the Budget, the Nifty is likely to head towards 18500-18600. We feel metal stock would contribute in the rally.
Major stock OI activity (Change):
Name |
Price |
Max Call OI |
Max Call % Away |
1212.35 |
1200 |
-1 |
|
505.55 |
480 |
-5 |
|
684.75 |
700 |
2.2 |
|
339.95 |
350 |
3 |
|
414 |
420 |
1.5 |
|
165.4 |
160 |
-3.3 |
|
113.45 |
115 |
1.4 |
|
146.15 |
150 |
2.6 |
|
137.6 |
140 |
1.7 |
|
107.5 |
110 |
2.3 |
Outlook:
Most metals stocks started the January series with huge Call base in OTM strikes. However, few leaders like Tata Steel, Hindalco and Coal India have already surpassed their Call base and are trading much higher. Even for stocks like Jindal steel & Power, Hindustan Copper, JSW Steel and SAIL, the OTM Call base is only 1.5-2.5% higher. Looking at the overall activity on the F&O space, we feel these stocks would also surpass their Call base and move higher. Metals have an inverse relation with the Dollar Index. This means if the Dollar Index falls, metals price should find buying support. Recently, the Dollar Index has remained muted and moved near 95 levels, which is the support zone. A move below 95 levels should support metal prices, which would be positive for metal stocks.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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