A fertile jump in volume

It is that time of the year when fertilizer stocks are in the limelight. And while the markets keep a tab on the progress of the monsoons, they also prefer to keep fertilizer stocks high on their radar during this time. Hence, it comes as no surprise that a large section of traders was focusing on the sudden and swift jump in the volume of many fertilizer stocks on Monday. Traders are of the view that there are strong signs of positive momentum as almost all the stocks from the segment are exhibiting strong Relative Strength Index (RSI) across various timeframes, up to 90 days. Indeed, Chambal Fertilisers saw nearly 3.5 lakh shares being traded on BSE, as against the two-week average of 2.36 lakh. Similarly, Gujarat State Fertilisers & Chemicals saw a huge jump with 12.5 lakh shares being traded on Monday, much higher than the two-week average of 4.28 lakh shares. The case was no different for stocks like Rashtriya Chemicals & Fertilisers, Mangalore Chemicals & Fertilizers, and Shree Pushkar Chemicals & Fertilisers.

Three stocks showcase strong bullish signals in F&O

The derivatives segment is in the news on most days nowadays – be it due to regulatory concerns or just the whopping volume it clocks daily. Three stocks -- Reliance Industries, JSW Steel, and NTPC – were quite hotly discussed in the F&O segment on Monday. In the case of RIL, traders say, a massive unwinding of 5,000 future contracts alongside shorting of 4,900 put options suggests a potentially bullish stance even as call option activity remained subdued at around 230 lots. Meanwhile, in the case of JSW Steel, call option buying dominated with 1,460 contracts traded compared to a negligible 12 put options, clearly indicating a bullish outlook. Similar to JSW Steel, NTPC also saw significant call option buying (3,200 contracts) versus minimal put option activity (143 contracts), suggesting a strong positive bias.

Is small still beautiful?

Small-cap stocks have been in the fast lane for a long – a fact corroborated by the nearly 26 percent jump in the BSE SmallCap index in the current calendar year to date. This is significantly higher than the benchmark Sensex gain of a little over 11 percent. Concerns around the small-cap universe have been lingering for a long and those waiting for the small-cap bubble – many in the market are actually using the term – to burst have been coming forth with many theories. The latest trend in the market is highlighting events in the US markets. They have been quick in circulating messages stating that small-cap stocks in the US are down around two percent in CY24 even as large caps are up over 17 percent. They say that this is the highest margin of outperformance since 1998 and hence needs to be taken seriously. The trend could mirror in India so be extra cautious when it comes to putting more money in small caps, they say.