Midcap party on

CNBC-TV18's Head-Markets Research, Anuj Singhal- While the Nifty is making its own move towards 5400, there is a midcap party, which is on and may well continue for some time. However, its not the kind of momentum we had earlier in the year in which you could have left any midcap future position overnight and made money the next day. This time, its much more selective and the gains are relatively muted, but there are gains to be made for sure

In Friday’s trade, we had stocks like IndusInd, DCB, Escorts, IFCI rallying quite smartly with decent Open Interest build-up. In fact the churn among midcaps that started last month is continuing in this series as well. My only worry is that Stock futures are again approaching towards 65-70% mark of the total futures book. Coincidentally, the last 2 crashes have happened when that mark reached 78%.

Nifty IVs have fallen significantly to early 20s now and as a result; we are seeing a lot of put buying for hedging. So while Nifty futures maintain a premium of around 20 points, there has been fierce action at 5000 Put and 5400 Call

In individual stocks, watch out for REC. It had a bit of a correction in Friday’s trade but that’s something the traders may use to build positions as it has been an outperformer. Others to watch will include Ballarpur and Ansal API

DISCLAIMER: The author is not allowed to trade in equity markets including Futures and Options. His only exposure to capital markets is via shares of TV18 and Network18 granted to him as ESOPs by the company and investments in some long-term mutual funds.