The Hindu Business Line : Short turn likely in SBI, M&M, HDFC

THE following strategies are based on Tuesday's trading in the derivatives segment on the NSE. The strategies are set up to take advantage of short-term reversals in the futures price.

The position has to be traded with protective stops to control the downside risk. The recommendation is typically valid for two days from the date of initiation. However, given the high volatility in the market at present, it may be better not to carry the position overnight. The target levels have accordingly being placed closer to the recommended entry price.

SBI: The March futures contract closed at 695. Buy the March contract if it trades above 693. Initiate the position with protective stop at 690. The upside target range is 699-703. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 500 units. Options-based strategies are not optimal, as the target price is not far away from the underlying market price.

M&M: The March futures contract closed at 495. Buy the near-month contract if it trades above 494. Initiate the position with protective stop at 490. The upside target range is 499-501. The margin on the futures position is approximately 18 per cent of the contract value. The minimum order size is 625 units. Options-based strategies are not optimal, as the target price is not far away from the underlying price.

HDFC: The March futures contract closed at 741. Buy the March contract if it trades above 739. Initiate the position with protective stop at 735. The upside target range is 746-748. 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.)

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

Stories in this Section
Reliance Vision, Growth funds to pay 50%; 2:5 bonus on Medium Term

JVSL to be listed on BSE

Bears dominate day's proceedings

Market sees the blues; Sensex sheds 121 points

On defensive bet

Short turn likely in SBI, M&M, HDFC

`India is a stock picker's market'

Selling pressure drags Sensex down

Jaiprakash Hydro IPO oversubscribed

3i Infotech IPO price band at Rs 90-100