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Derivatives and Quantitative Outlook

* Broader markets recovered sharply from the lows seen in the June series. While banking was the clear leader in the recent recovery, stocks from the OMC space remained largely laggards amid elevated crude prices. With recent declines in crude, we believe stocks like BPCL will show a relative outperformance and move towards | 380 in coming sessions

* Leveraged positions in the stock have declined noticeably in the last couple of months as the stock witnessed significant long liquidation. The current open interest in the stock is one of the lowest seen in many years near 1.5 crore shares while the stock has shown an inclination of an up move with long accumulation whenever open interest moved to lows. We have seen initial signs of accumulation in the delivery segment. Hence, we expect gradual long additions in the stock, which may take it higher

* The stock has seen continuous buying support near | 320-330 levels. It remained above these levels for almost the entire August series. At the same time, with continued Put writing at 300 and 330 strikes, we expect downside risk to be limited

* Furthermore, Call OI of 330 and 340 strike is already witnessing closure even in the September series suggesting positive bias in the stock. These positions are expected to aid it in breaking the option range on the higher side

* The stock has seen delivery based action around | 300-320 in the last couple of months. Since then, it has been crawling northwards with early signs of the stock making a base at the support area. In the previous corrections, the stock had broadly held this zone. This time also it has reverted closer to those level and seems to be respecting the said support

* Note: Call has been initiated on iClick2Gain on September 8, 2022

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