F&O: Larger F&O reinvestments put these stocks on traders’ radar

Futures of several stocks have seen a rise in the October series with merchants renewing its bets on the September contracts, which expired on Thursday. A look at stock futures that have seen above-average rollovers and their near-term prospects.

Titan Company

CMP: Rs 3,817
Rollover to October series: 97.5%
Change in futures open interest in October series: 7%
Stock performance last week: 0.5%

Traders are betting on Titan as higher gold prices and expectations of a pick-up in demand due to the festive season are seen as driving profitability. “The stock has been rising from high to low for the last six trading sessions,” said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. Taparia said the stock is now hovering near a key hurdle of Rs 3,850 zones and a small follow-through above Rs 3,850 could take it to a new lifetime high territory of Rs 4,000-4,250 zones.

Indian oil corporation
CMP: Rs 180
Rollover to October series: 94%
Futures open interest change in October series: 1%
Stock performance last week: 7.8%

Analysts expect oil marketing companies’ margins to improve with falling crude oil prices. Traders could buy the stock for a target price of Rs 196 with a stop loss of Rs 171, said Ruchit Jain, senior research analyst at 5Paisa.com.
“The IOC has formed support around its 100-day EMA (exponential moving average) and the RSI (relative strength indicator) is hinting at positive momentum along with bullish price volume action,” Jain said.

Colgate-Palmolive (India)
CMP: Rs 3,764
Rollover to October series: 86%
Change in futures open interest in October series: 28%
Stock performance last week: 2.8%

Motilal Oswal’s Taparia says the stock has seen a consolidation breakout on a daily basis with a decisive hold above the Rs 3,700 zones. “There has been an increase in trade and delivery volumes along with new long-term accumulation,” he said. Taparia has set a target price of Rs 3,950 and recommends holding with a stop loss of Rs 3,600.

ICICI Pru life
CMP: Rs 789
Rollover to October series: 80.6%
Change in futures open interest in October series: flat
Stock performance last week: 2.8%

The stock has hit all-time highs, showing strong underlying momentum, said Sriram Velayudhan, senior vice president of IIFL Values. “While the futures open interest structure has been flat, the price action has been rising, pointing to prolonged accumulation.” Velayudhan has a target price of Rs 845 and advises holding with a stop loss of Rs 770.

Pharmacy of the Sun
CMP: Rs 1,948
Rollover to October series: 77%
Change in futures open interest in October series: 2%
Stock performance last week: 4.5%

Sun shares hit record highs on Friday after a ‘Buy’ rating from brokerage UBS. Traders could buy the stock with a target price of Rs 2,100, maintaining a stop loss of Rs 1,860, said Jain of 5Paisa.com. “The stock has seen a gradual upward movement in recent weeks and the RSI oscillator is hinting at a continuation of the positive momentum,” he said. “Volumes are good along with rising prices and hence we expect the bullish trend to continue at its all-time highs.”

EX
CMP: Rs 206
Rollover to October series: 87%
Futures open interest change in October series: 20%
Stock performance last week: -10.9%

Indian power exchange fell last week due to reports about the implementation of market coupling, which aims to establish a unified price for electricity on different trading platforms. This could impact the competitive advantage of the largest player in this space. Analysts see more weakness in the stock. “It added significant open interest of 20% with a sell-on-bounce stance on stock indicating shorts are intact with weak short-term price structure,” said Taparia, who has set a price target of Rs 190. 215 rupees.