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Business News/ Markets / Stock Markets/  Nifty February series outlook: 4 stocks where investors can park their money; do you own?

Nifty February series outlook: 4 stocks where investors can park their money; do you own?

ICICI Bank, National Aluminium Co. Ltd, Crompton Greaves Consumer Electricals Ltd, and HPCL are the top picks for the February series, according to Religare Broking. Here's why the brokerage sees the stocks outperforming this month.

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Close-up of hands of businesswoman analyzing stock market charts and key performance indicators (KPI) with business intelligence (BI) on notebook computer and smartphone screen, fintech (financial technology)

Domestic equity benchmarks Nifty 50 and BSE Sensex experienced robust buying during intraday trading, concluding the day with substantial gains in the previous session, propelled by the performance of heavyweights in the energy and IT sectors, such as Reliance Industries, Infosys, TCS, Power Grid, and NTPC. 

The domestic market witnessed across-the-board buying amid positive global cues while experts observed that the pro-growth Interim Budget 2024 also influenced investors to buy quality stocks after the recent correction.

The Sensex settled at 72,085.63, up 440 points, or 0.61 per cent on Friday and is still 1,342 points down from its all-time high of 73,427.59 which it hit on January 16, 2024. BSE Midcap and Smallcap indices hit their fresh all-time highs of 39,140.16 and 46,169.7 respectively, during the session.

Nifty 50 jumped two per cent during the session to hit its fresh all-time high of 22,126.80, however, the index cooled off and closed with a gain of 156 points, or 0.72 per cent, at 21,853.80 on February 2. Nifty 50 ended the month of January little changed, after rising nearly 14 per cent in the last two months of 2023.

Also Read: Tata Motors Q3 Results: Net profit surges 137% to 7,025 crore, revenue up 25% YoY; 5 key highlights

In its derivatives, monthly rollover report, domestic brokerage firm Religare Broking revealed that Nifty 50 closed at around 21,350 after Volume weighted average price (VWAP) based buying activity was witnessed in the second half of the day.

In its report, Religare highlighted that at 96 per cent, cement is the sector where highest rollovers were witnessed in the January series. Whereas at 87 per cent, telecom is the sector where the lowest rollover was witnessed.

Nifty, Bank Nifty derivates summary

Nifty futures has rolled at around 81 per cent compared to 80 per cent which is at par with respect to the previous series. The Open Interest (OI) for the new contract is lesser by around nine lakhs with respect to to the last month contract implying reduction of shorts. Bank Nifty futures rolled at 77 per cent compared to 81 per cent, lesser than the previous month.

Bank Nifty futures have seen higher open interest of around 14 lakh with respect to the last month. This might be because of the more short positions in Bank Nifty during the January expiry. Bank Nifty had underperformed the Nifty in the January series losing eight per cent against the Nifty which lost two per cent, and the brokerage believes this might not continue in February.

Which stocks to invest in February series as per Religare Broking?

ICICI Bank, National Aluminium Co. Ltd, Crompton Greaves Consumer Electricals Ltd, and Hindustan Petroleum Corporation Ltd (HPCL) are the top picks for the February series, according to Religare Broking.

ICICI Bank (CMP: 1,024)

The stock remained flat in the previous series but added more than 22 per cent OI. The positions are being rolled at 97 per cent. ‘’With good cash based buying in last three days of the series and the stock trading above weighted average price of 1,002, we believe its poised to test 1060-1080 in the near term,'' said the brokerage.

National Aluminium Co. Ltd (CMP: 153)

The stock rose by around 10 per cent with substantial OI addition of 78 per cent. With rollovers at par but higher base suggesting participants carrying their directional bets. ‘’Holding the support at 128, we anticipate the stock to edge further higher in the coming days,'' said Religare Broking.

Crompton Greaves Consumer Electricals Ltd (CMP: 304)

The stock gained marginally with no major change in OI. ‘’With rollovers at par at 97 per cent with the previous series, we believe the stock is still carrying longs. Holding 288, we anticipate the stock to do good in February series,'' saod the brokerage.

HPCL (CMP: 489)

The stock has witnessed a good run up off late and gained three per cent in January series. ‘’But with unwinding of major positions and lesser rollovers, we believe the stock is poised to witness some profit taking at current levels. So keeping a stop at 465, be negatively biased in the stock,'' said Religare Broking.

Also Read: Bulls tighten grip over OMCs after 15,000 crore capex infusion; IOC, BPCL, HPCL hit 6-9% upper circuit

Outlook for February

Nifty February Futures contract open interest started with around 122 lakh compared to 128 lakh in January. Bank Nifty February futures have seen an open interest of around 35.2 lakh compared to 20.8 lakh in January.

The highest Nifty February monthly options open interest is at 21,000 PE and 23,000 CE. Nifty 23,000 call open interest stands at around 62,000 contracts and 21,000 put open interest at around 58,000 contracts.

‘’At expiry, VIX was at around 14 per cent levels implying around 780 odd points swing in the Nifty in next 30 days,'' said Religare Broking.

The brokerage believes banking, fast-moving consumer goods (FMCG), and chemicals are the sectors that can outperform the index in the February series.

Foreign institutional investors (FIIs) have sold 35,000 crore in cash market for the January month. FIIs long ratio is now at 22 per cent compared to 70 per cent previously in index futures implying more of hedged positions into the February series.

Also Read: Budget 2024: Outcome of interim budget is muted; Environment suitable for pre-election rally to continue says Vinod Nair

Technical View: A combination of both long and short rolls was seen in February series. For February futures with an average price of around 21,450 which becomes a pivot for the month. Till the time Nifty trades above 21,200, the index is in a 'buy on dips mode' for the first weekly expiry.

‘’We expect the Nifty to find strong support at 21,200 levels for February series. On spot basis 21,200-22,100 might be the range for Nifty for first fortnight of February series,'' said Religare Broking.

Ratio wise (Bank Nifty/Nifty) has a resistance at 2.20 and support at 2.05 The ratio between Bank Nifty and Nifty currently at around 2.1. The major support for Bank Nifty would be around 44,000 levels. ‘’We expect Bank Nifty to be in 44,000-46,500 levels for the first fortnight of February series,'' said the brokerage.

On the outlook for Nifty 50, Ajit Mishra, SVP - Technical Research, Religare Broking Ltd said, ‘’Nifty has retested its record high after consolidating for two weeks but we feel it is early to assume that we are set for the next leg of the up move. It needs sustainability above 22,150 to march towards 22,500+.''

‘’Besides, consistency in the participation from the banking majors is also critical for a steady trend else the range-bound trend would continue. Traders should focus more on stock selection in the present scenario and maintain positions on both sides,'' added Mishra.


Disclaimer: The views and recommendations above are those of individual analysts and broking companies, not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at
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Published: 03 Feb 2024, 06:04 AM IST
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