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Can metals shine again in November series ?

Commentary:As the Nifty witnessed a volatile October, sectoral rotation was clearly visible where metal stocks were in focus in the expiry week as they reverted from their major Put bases. Open interest in the metal stocks were relatively higher and we saw good rollovers happening for the November series. However, Hindalco and Tata Steel was the exception, which has relatively low OI base and fresh buying interest are expected in November series.

Major Option activity (metal stocks):

 

 

Outlook:

Major buying demand in metals stocks emerged after the price hike in October series and ahead of the festive season, demand for base metals would continue to be higher which should provide sentimental boost. Last week SAIL came out with its quarterly numbers and it was above Street expectations post which it rose 10%. Option activity is higher in most metals stocks. For instance, stock like Tata Steel and Hindalco are witnessing closure in Call writing positions ahead of the results whereas fresh Call buying were observed in Jindal Steel and Vedanta. Looking at the overall derivatives set-up, we feel metal stocks are likely to attract money-inflow and closure in short OI positions in JSW Steel, Vedanta and Jindal steel would provide more upsides.

Major Option activity (metal stocks):

 

 

Outlook: