Moneycontrol
Nov 20, 2012 03:09 PM IST | Source: Moneycontrol.com

ABB, Canara Bank, Ultratech may see long liquidation

The range bound markets prevailing for the last couple of months have led to an increase in leveraged positions by market participants. The stock futures open interest has increased to 202 crore shares, which is relatively high as compared to near term build up of positions.

 
 
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The range bound markets prevailing for the last couple of months have led to an increase in leveraged positions by market participants. The stock futures open interest has increased to 202 crore shares, which is relatively high as compared to near term build up of positions. We believe the current jittery market may lead to long liquidation in certain highly leveraged stocks.


PCR-OI at the 5700 strike has declined quite sharply from to 0.43 in the last four or five sessions. This indicates the increasing selling pressure at higher levels and crucial resistance near 5700.


The last two months volume weighted average price of the Nifty is placed at 5690. We believe the Nifty would find it tough to sustain above this level in the current series. Inability to hold this level may lead to closure of long positions in stock futures towards the November settlement.


We have identified stocks where the leverage in the futures segment has increased sharply in the last month. The open interest of October 15 has been considered, when the bullish bias was quite high. It has been compared with the open interest on November 16 when the Nifty moved below the major support of 5600. We expect these stocks to fall on the back of closure of long positions.



High leverage stocks: Likely to remain under selling pressure…

Stock 16- Oct Fut OI Price 16- Nov Fut OI Price%OI Chg%P Chg
ABB 771785101072231.00%-8.00%
Canara Bank 2544424354742839.40%1.00%
Ultratech Cement 439820336991190959.00%-6.10%


 


 


 


 


 


Source: NSE, Seediff, ICICIdirect.com Research










































Important spot levels

Stock S2 S1 CMP R1 R2
ABB 680700717.2727739
Canara Bank 393409424.4430441
Ultratech Cement 180518551905.719351975


 


 


 


 


 


Source: NSE, Seediff, ICICIdirect.com Research


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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