Buy Bajaj Finserv in range of Rs. 6040-6140 Target: Rs. 7160 Stop Loss: Rs. 5500 Time frame: Three months
Derivatives & Quantitative Outlook
The NBFC space has remained largely range bound in the last five months with stocks like Bajaj Finserv underperforming its peers. We believe the stock has significant room for upsides. After remaining range bound for some time, the recent up move is likely to continue towards Rs. 7000 and above levels.
The open interest in the stock has increased sharply in the last two months. Current OI in the stock is at a six month's high. As the stock has failed to participate with a market move, short positions were formed in the stock. Last few sessions of the November series saw closure of open interest suggesting ongoing short covering. We believe the ongoing short covering will continue, which should take the stock higher in the coming trading sessions.
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