Open interest surges for SAIL, Tata Chemicals, bank stocks

Banking, steel, chemical and pharma companies are garnering high interest in the December futures segment as traders look for select opportunities in the broader market after the over 75% rally in benchmark indices since March. PSU banks seem to be particularly in favour because of their cheaper valuations. ET takes a look at 5 stocks in the stock futures space which are gaining high open interest and details their near-term outlook.

CANARA BANK
CMP (Rs ): 109.95
Share Price chg in Dec Series (%): 9.95
OI chg in Dec Series (%): 118.27
Canara Bank has seen the highest increase in open interest in the stock futures segment as traders built long positions amid the surge in interest around state-owned banks. The optimism in the PSU banks has risen even more after the Reserve Bank of India’s internal working group proposed several recommendations to revive the Indian banking sector. The stock can go up to Rs 122-125 which is a positional target with a Rs 103 stop loss, said Rajesh Palviya, head -- technical and derivatives at Axis Securities.

STEEL AUTHORITY OF INDIA
CMP (Rs ): 54.25
Share Price chg in Dec Series (%): 16.54
OI chg in Dec Series (%): 83.71
Expectation of strong demand outlook has lifted shares of Steel Authority of India. The stock has seen one of the highest increases in open interest in the December futures on build-up of long positions. “The stock had given a consolidation breakout and is trading at 18-month high. It is continuously moving up from last five weeks. It may go to Rs 62 and has support at Rs 48,” said Chandan Taparia, derivative analyst at Motilal Oswal.

KOTAK MAHINDRA BANK
CMP (Rs ): 1,821
Share Price chg in Dec Series (%): -3.6
OI chg in Dec Series (%): 72
The stock has seen some build-up of short positions after the MSCI weight increase related flows. “Post MSCI flows, we are seeing mild profit booking. The stock is near important support of Rs 1,800. We expect the stuck to resume uptrend to Rs 1,950-Rs 1,980 levels, so one can buy the stock on dips near Rs 1,800 with stop loss of Rs 1,750,” said Palviya of Axis Securities.

TATA CHEMICALS
CMP (Rs ): 455.40
Share Price chg in Dec Series (%): 18.8
OI chg in Dec Series (%): 33.52
Tata Chemicals has seen addition of bullish positions in the December series and touched record high levels. This is the stock’s longest gaining streak since 2002. Promoter Tata Sons on Wednesday purchased more than 18 lakh shares of the company via open market transaction. Taparia of Motilal Oswal said one can buy the stock at current levels for a target of Rs 500 and said the stock has support at Rs 420 level.

BHARTI INFRATEL
CMP (Rs ): 239.55
Share Price chg in Dec Series (%): 9.43
OI chg in Dec Series (%): 24.38
Most of the bullish build-up in Bharti Infratel has come after Bharti Airtel on Wednesday said its subsidiary Nettle Infrastructure Investments has acquired an additional 4.94% stake in Bharti Infratel for Rs 2,882.32 crore. Maybank Kim Eng Securities in a note last week said valuations of Infratel are inexpensive at 5.1 times FY22 estimated EV/Ebitda versus five-year average of 9 times. The brokerage has a buy rating on the stock with a target price of Rs 270.