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Monday, November 28, 2022

Equity Futures: Britannia shines on strong results, more gains likely

Informist, Monday, Nov 7, 2022

 

By Vaibhavi

 

NEW DELHI – Britannia Industries stole the spotlight today due to its strong quarterly numbers, which prompted traders to place aggressive bets in its derivative segment in anticipation of more gains.

 

The stock shot up over 10% today to hit a record high of 4,190 rupees in the cash market, even triggering a temporary trading halt on the way. The strong gains in the stock came after the company’s bottomline for the September quarter topped the Street’s expectation, aided by a jump in volumes. 

 

Similar bullish action was seen in the November futures of the stock, with aggressive addition of long positions pushing open interest in the contract up over 37%.

 

Action in the options segment did not lag behind, as premiums for higher strike price out-of-the-money call options of 4,150-4,400-rupee skyrocketed as traders bet on hope of the stock testing those levels in the near future.

 

Looking at the strong gains in the scrip, it seems to be approaching the 4,160-4,170-rupee zone, a decisive surpassing of which would help it move further up towards 4,350-4,400-rupees in the short term, said Rajesh Palviya, head-technical and derivatives, Axis Securities.

 

Maintaining a bullish view on Britannia, Palviya suggested investors accumulate the stock at intraday dips towards 4,000 rupees. 

 

Though profit-booking after the sharp single-day upmove cannot be ruled out, the downside seems limited, as the stock has strong support at around 4,000 rupees, Palviya said. 

 

Put options of the 4,000-rupee strike price also garnered the highest addition of fresh positions.

 

Today, the scrip ended nearly 9% higher at 4,139.25 rupees.

 

Another star performer in today’s session was banking bellwether State Bank of India. SBI also hit a lifetime high of 622.70 rupees in the cash market as it notched nearly 5% gains.

 

This was after the lender posted its best ever quarterly net profit in Jul-Sep.

 

Positions taken by traders in the options segment suggest that they see scope of more gains in the stock. With the sharp rise in today’s session, traders unwounded their positions across in-the-money call options of lower strike prices.

 

On the other hand, they bought out-of-the-money call options of higher strike prices of 615-670 rupees as they took cover in these contracts on hope of the stock soon testing those levels.

 

Buoyed by the positive momentum for SBI, the stock is headed towards fresh lifetime highs of 640-650-rupees in the near term, said Sneha Seth, technical and derivative analyst at Angel One.

 

Today, shares of SBI ended 3.4% higher at 614.15 rupees.

 

As for the Nifty 50, it finally managed to end above its crucial resistance of 17200 points, albeit marginally. The index ended 0.5% higher at 18202.80 points, its highest closing level since Jan 17. 

 

“Given that the Nifty 50’s surpassing of 18200 points was supported by a sharp upmove in banks, we expect the index to now inch higher towards its lifetime highs,” said Viraj Vyas, technical and derivative analyst at Ashika Institutional Broking.

 

Today, the Nifty Bank index ended above its stiff resistance of 41500 points. The sectoral index closed over 1% higher at 41686.70 points.

 

–Nifty 50 Nov closed at 18262.25, up 68.25 points; 59.45-point premium to spot index

–Nifty 50 Dec closed at 18340.50, up 70.45 points; 137.70-point premium to spot index

–Nifty 50 Jan closed at 18400.00, up 81.65 points; 197.20-point premium to spot index

 

SBI, Bank of Baroda, Divi’s Laboratories, Vedanta, Britannia Industries, Tata Motors, Adani Enterprises, HDFC Bank, ICICI Bank, and Reliance Industries were among the most actively traded underlying stocks.

 

Volume for today’s derivatives trade was not updated on NSE’s website at the time of writing this story.  End

 

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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