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Equity Futures: Short bets surge in Bajaj Auto as sales fall in Nov

Informist, Thursday, Dec 1, 2022


By Vaibhavi


MUMBAI – Traders aggressively added short positions in the futures segment of Bajaj Auto as a fall in the company’s total sales in November dented sentiment. Open interest in the December futures contract of the stock surged over 15%, indicating a bearish sentiment among traders.


Total sales of Bajaj Auto declined 19% on year in November due to a sharp fall in exports and weak two-wheeler demand from rural markets, which resulted in an over 1% fall for the stock in the cash market.


The weak sentiment was also reflected in the options segment of the stock wherein traders sold call options and bought put options.


Premiums across call options of 3,800-4,100-rupee strike prices fell 20-30% as traders turned active at these contracts. On the flip side, fresh positions were added across put options of 3,600-3,300-rupee strike prices. Buying across these strike prices indicates expectations of the stock falling to these levels in the coming days.


Bajaj Auto is likely to witness some consolidation in the near term, especially until it manages to make a strong move above 3,800 rupees, said Ratnesh Goyal, senior technical and derivative analyst at Arihant Capital Markets. 


Goyal also pegs support for the stock at 3,500-3,550-rupees, but suggests that investors add fresh longs in the stock only after it has surpassed 3,800 rupees. Today, the scrip ended 1.2% lower.


Meanwhile, US Federal Reserve Chair Jerome Powell’s comments hinting at slower rate hikes from “as early as the December meeting” aided sentiment for equities and lifted the Nifty 50 to a fresh intraday high.


Going by the positive momentum in the market, analysts expect the Nifty 50 to move towards 19000 points in the coming sessions. Not ruling out the scope of profit booking, especially after an eighth-day winning streak, analysts see support coming in for the index near 18600 points.


Today, the Nifty 50 closed 0.3% higher at a fresh record closing high of 18812.50 points


–Nifty 50 Dec closed at 18945.00, up 70.50 points; 132.50-point premium to spot index

–Nifty 50 Jan closed at 19038.15, up 71.00 points; 225.65-point premium to spot index

–Nifty 50 Feb closed at 19115.00, up 66.30 points; 302.50-point premium to spot index


The total turnover in the futures and options segment of the National Stock Exchange was at 323.02 trln rupees, against 157.96 trln rupees on Wednesday.


The turnover in index options was 320.02 trln rupees, compared with 155.23 trln rupees in the previous session. The total premium turnover of index and stock options stood at 485.14 bln rupees, compared with 413.05 bln rupees on Wednesday.


ICICI Bank, Tata Steel, Ambuja Cements, Bandhan Bank, L&T Technology Services, Ultratech Cements, Infosys, HDFC Bank, Reliance Industries, and State Bank of India were among the most actively traded underlying stocks.  End


Edited by Aditya Sakorkar


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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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Source: Cogencis

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