The Hindu Business Line : Outlook may turn positive for M&M, Tata Tea

M&M: The stock closed at Rs 493 in the spot market. The outlook may turn positive if the stock moves above Rs 500. The upside price target is Rs 524.

Buy February futures after the stock moves above Rs 500 in the spot market. Initiate the position with spot-market-stop-loss at Rs 490. The position has to be traded with trailing stops to control the downside risk. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 625 units.

Traders can construct ratio call spread as alternative strategy. This position can be initiated with one long January 500 calls and two short January 520 calls. The spread can be set up for a net debit of one point. The payoff will be positive if the stock trades between Rs 502 and Rs 520 at the horizon.

Tata Tea: The stock closed at Rs 465 in the spot market. The outlook may turn positive if the stock moves above Rs 471. The upside price target is Rs 503.

Buy February futures after the stock moves above Rs 471 in the spot market. Initiate the position with spot-market-stop-loss at Rs 460. The position has to be traded with trailing stops to control the upside risk. The margin on the futures position is approximately 16 per cent of the contract value. The minimum order size is 550 units.

Traders can alternatively construct ratio call spread. This position can be initiated with one long January 470 calls and two short January 500 calls. The spread can be set up for a net debit of one point. The position will carry positive payoffs if the stock trades between Rs 472 and Rs 500 at the horizon.

(The opinion expressed in this column is based on technical analysis. There is risk of loss in trading.)

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Catch 'em young at Alipore...

ICAI issues guidance note on employee share-based payments

Thrust on MF biz for more fee-based income — Andhra Bank buys 5 pc stake in Principal venture

Range-bound movement

Merger prospects boost it

Outlook may turn positive for M&M, Tata Tea

FII stake in Satyam up at 56.59 pc

Select mid-caps gain; Bajaj Auto skids