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Derivatives and Quantitative Outlook…

* The cement space has remained largely range bound in the last couple of months with stocks like Ambuja Cement underperforming its peers in the ongoing recovery. We believe the stock has substantial room for upsides. After remaining range bound for some time, the recent up move is likely to continue towards | 300 and higher

* The open interest in the stock has increased gradually in the last two months along with incremental stock price. Current OI in the stock is at a four-month high. Considering continuous additions and resilience of the stock, we expect further fresh accumulation to be seen, which should take it higher in the coming sessions

* The stock has been witnessing accumulation near the support level of | 250. With continued Put writing in 250 and 260 strikes, we expect downside risk to be limited. On the other hand, Call OI of 290 and 295 strike is already witnessing closure of positions suggesting upsides in the stock. These positions are expected to aid it to break the option range on the higher side

* The stock witnessed noteworthy delivery based activity from October 2020 till now as it exceeded its multiple hurdle of | 240-250 levels and moved towards | 275. Since accumulation was seen in this stock in the last few months, we believe downsides are limited in it while positive momentum is likely to remain intact in the stock above | 250 levels

* The stock has been testing | 280 levels for the last three years. Post the breakout in October, 2020 it has been just consolidating in the last three months above | 250. We believe it can start building up long positions from these levels as there is ample room left in the stock

Buy Ambuja Cement in range of Rs. 268-275; Target: Rs. 325; Stop Loss: Rs. 247; Time frame: Three months

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