Wednesday 16 September 2015

Bharat Forge, L&T, Ambuja Cements to be Under Pressure Today

Continued selloff by foreign investors pressured the Nifty (7,829) on Tuesday. Selling pressure is likely to weigh on markets on Wednesday as well, though Nifty futures are trading higher in pre-open trade.

Open interest (outstanding position) in the September Nifty future increased by 90,000 shares with the premium on futures turning negative 0.55 points from 2.95 points earlier. This indicates fresh addition of bearish bets to the Nifty September futures.

The option open interest data also seems to suggest the same view. Open interest of in-the-money (options having positive intrinsic value) 7,800 call options increased by 3.4 lakhs, while open interest in the 7,800 strike put fell by 2.1 lakh shares. Open interest in the 7,900 strike call also increased by 1.9 lakhs. This suggests bulls are losing confidence in the market and preparing themselves for another fall.

Total open interest in put options fell by 5.6 lakh shares whereas calls added 7.3 lakh shares to open interest pushing the Nifty put-call-ratio (PCR) to 0.93 from 0.94 earlier.

However, large concentration of open interest at 7,500 and 7,600 strike puts suggest that there will be support for Nifty between 7,500-7,600 level in case of any big fall.

Among individual stocks, Bharat Forge, Larsen & Toubro and Ambuja Cements saw addition of bearish bets.        

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