Rotation among momentum stocks

CNBC-TV18's Head-Markets Research, Anuj Singhal - We have got answer to yesterday's question on whether the momentum is back and for the current series; the answer is an emphatic yes. In fact, 5000 is beckoning again for the Nifty and it would be interesting to see how things shape up if we approach those levels. There is still skepticism and the conviction is still missing. To that extent, every time Nifty approaches 4950 and beyond, you would see adventurous shorts but if the Nifty crosses these levels convincingly, some of the shorts may get squeezed.

But clearly, the highlight of this truncated week has been the way Stock futures action is back. And the last 2 days have seen momentum stocks coming back with a vengeance. And while it's a separate debate as to whether this is healthy or not, this clearly tells you that traders are coming back in stocks albeit with rotation. So yesterday you saw an RNRL and an RPL shedding Open Interest but that was more than compensated by the likes of Chambal Fert and Arvind Mills. Who knows, next in line could be Punj Lloyd and Neyveli Lignite

To me, Satyam still remains the stock to watch as I pointed yesterday. This stock can be a real bellwether among momentum stocks if things go its way. The kind of volumes it can attract can never be matched by the likes of Infosys, TCS or Wipro. And in fact, this is one counter, which has been adding Open Interest while others have rallied on back of Open Int cut

Among other stocks, watch out for infrastructure. GMR and IRB saw significant build-up and that may continue for a bit

Of course, we will have the inflation numbers at noontime. And with 7.3% factored in by market, this should not derail the rally unless it's a real shocker'

DISCLAIMER: The author is not allowed to trade in equity markets including Futures and Options. His only exposure to capital markets is via shares of TV18 and Network18 granted to him as ESOPs by the company and investments in some long-term mutual funds.