The Hindu Business Line : Outlook may turn positive for Bank of Baroda, BHEL

Note that the protective stop is far away from the recommended entry price. Trading with a closer initial stop will, however, be sub-optimal. Trail the stops to control the downside risk. The margin on the futures position is approximately 20 per cent of the contract value. The minimum order size is 1,400 units. Alternative strategies are not available, as options on the stock are not actively traded.

BHEL: The March futures contract closed at 794. The outlook may turn positive if futures contract trades above 797.50. The upside target is 825.

Buy March futures after it trades above 797.50. The position should be ideally initiated with protective stop at 770. But the stop is so far away from the recommended entry price that the risk-reward ratio is not attractive.

Less aggressive traders can set up the long futures position with protective stop at 782. 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 600 units. No alternative strategies are available, as options on the stock are not actively traded.

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

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