Futures positions in RIL touch 18-year high; 'Any upmove could be sharp'
futures contracts of Reliance Industries last week were at the highest level in 18 years as traders mounted bearish bets amid the weakness in the stock in recent months. Analysts said the stock is oversold and a turn in sentiment could prompt liquidation of these bearish bets that could result in outsized moves in the short run.
Open interest (OI) or outstanding positions for Reliance Industries were up at 185.38 million shares on November 28 (Thursday), its highest level since 2006, from a low of 68.48 million shares on July 10, according to analysts. Open Interest indicates the number of active contracts comprising bullish and bearish positions.
Open interest came down to 174.32 million shares on Friday on account of the 1.6% up-move in the stock to ₹1,292. Analysts said outstanding positions still remain high.
«Shares of Reliance Industries have been persistently declining for the past four months and OI has consistently gone up, indicating a short buildup in derivatives contracts,» said Rohit Srivastava, founder of indiacharts.com.
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