Momentum to continue in pharma space: Angel Broking

Views of Ms. Sneha Seth (Derivative Analyst, Angel Broking):

"It was yet another day, when the benchmark index climbed above 10100 mark; but, profit booking at higher levels eventually led index closing below this psychological level.

As far as options activity is concerned, 10100-10200 call options continue adding fresh positions. While, good amount of unwinding was visible in 10000 call option. On the other hand, build-up was quite scattered in put options as we saw 10000, 9950, 9800 and 9400 put options adding fresh position. Maximum concentration of open interest is now placed at 10200 call and 9900 put options.

From past couple of days, pharmaceutical counters like SUNPHARMA, DRREDDY, WOCKPHARMA, AUROPHARMA and LUPIN has rallied due to good amount of long formation. Looking at the open interest activity, we believe this space has further upside potential.

Since, the start of September series we are consistently witnessing good amount of open interest addition in both Nifty as well as BankNifty, we believe majority of the positions formed are on long side. However, participant wise activity suggests, retail participants have formed long position in index future; while, stronger hands continue adding shorting in recent upmove. Thus, we would advise traders to remain light in index and focus on individual stocks."

Source : Equity Bulls

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