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Spike in open interest: 5 stocks that are buzzing on the F&O radar

Midcaps are seeing a selloff. Activity in the derivatives space is indicative of the same.

, ET Bureau|
Updated: May 30, 2017, 08.19 AM IST
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ET takes a look at five such stocks which are garnering interest in the June F&O series.
ET takes a look at five such stocks which are garnering interest in the June F&O series.
Benchmark indices are at record levels, but midcap stocks are seeing a huge selloff. Activity in the derivatives space is indicative of the same as only some select stocks are seeing momentum on the positive side. ET takes a look at five such stocks which are garnering interest in the June F&O series.

Hindalco Industries
CMP: Rs 201.2
Open interest change in June series: 19.6%
Stock price change in June series: 5.6%


Hindalco has been attracting bullish bets in anticipation of strong fourth quarter results, due Tuesday. Earlier this month, its arm Novelis reported a 46% jump in net income for the March quarter. “There is positive momentum in terms of earnings expectation after Novelis did well. Stable aluminium prices are also helping the company,” said Abhisar Jain, VP-research (metals and mining), Centrum Broking.

Escorts
CMP: Rs 671.2
Open interest change in June series: 36.3%
Stock price change in June series: 6.5%


The farm equipment maker saw its net profit surge over three fold to Rs 59.5 crore in the quarter ended March on Monday, leading to build-up of long positions in its June futures. “The stock has given a breakout above Rs 655 on Monday and till that level holds, the stock can go to Rs 700-715,” said Chandan Taparia, derivative analyst, Motilal Oswal Financial Services.


Sun Pharma
CMP: Rs 502.6
Open interest change in June series: 43.2%
Stock price change in June series: -15.04%


Sun Pharma’s current month futures have witnessed a surge in open interest after the company reported a 13.6% fall in consolidated net profit for the March quarter from a year ago period at Rs 1,223.7 crore. Downgrading the stock to ‘sell’ from ‘hold’, CLSA said challenges in the US will continue for Sun Pharma due to higher pricing pressure across products. The brokerage has cut target price on 41.8% to Rs 500.


Jubilant FoodWorks
CMP: Rs 940.3
Open interest change in June series: 27.1%
Stock price change in June series: -7.3%


In anticipation of weak numbers, traders had built short positions. After market hours on Monday, the company, which operates Domino's Pizza and Dunkin’ Donuts outlets in India, posted a 76% fall in standalone profit for the March quarter from a year ago. “Earnings were a miss on every front. We expect the stock to remain under pressure in the near term,” said Abneesh Roy, senior VP-institutional equities, Edelweiss Securities.

Tech Mahindra
CMP: Rs 379.4
Open interest change in June series: 19.8%
Stock price change in June series: -10.9%


The stock plunged to a 43-month low on Monday and short positions were built in June futures after the company posted a 30.2% fall in consolidated net profit in the March quarter at Rs 589.7 crore from Rs 845 crore in the previous quarter. Macquarie has cut its FY18-FY19 EPS estimates following the result and cut target price to Rs 420 from Rs 474 earlier, saying that it prefers HCL Technologies and Infosys in largecap Indian IT space.

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