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Derivatives and Quantitative Outlook…

* In the current market scenario, the broader market is recovering significantly while traction was also seen in infrastructure, realty and cement stocks. Cement stocks are also seeing the same trend as stocks like UltraTech Cement and Ramco Cement are relatively outperforming in the space

* The open interest in the stock had moved to four-month highs in early January 2021. Since then, it has seen a sharp decline in OI at the end of January while OI levels have come down more than 30% along with a gradual fall in stock prices. Closure of leverage positions was seen in the stock in mid-January indicating closure of long positions. We believe longs positions in the stock are intact. Also, we expect long additions in the stocks. The upward bias may continue in it in coming weeks

* In the options space, the significant OI for the stock is holding at the ITM of 780 and 800 strike. As it started seeing trading above said levels, closure of positions was seen in ITM Call strikes. These positions are shifting to higher strikes of | 900 for the February series. This activity indicates expected upsides in the stock in the current series

* The stock witnessed noteworthy delivery based activity in early January 2021 at the levels of | 780-800, which is a crucial support level for the stock. Since accumulation was seen in this stock last month, we believe downsides are limited in it while positive momentum is likely to remain intact in the stock above the mentioned levels

* The stock has been hovering in the range of | 760-870 in the last couple of months. Now, it has finally moved above this range in the last trading session. After a round of consolidation with time based correction, it has started moving up again. We believe the ongoing momentum will continue in the coming months

Buy Ramco Cement in range of Rs. 850-867; Target: Rs. 995; Stop Loss: Rs. 782; Time frame: Three months

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