The Hindu Business Line : Buy BHEL, OBC, SBI futures for short throwbacks

THE following strategies are based on Tuesday's trading in the derivatives segment on the NSE. The strategies are constructed to take advantage of short throwbacks in futures prices. The position is inherently risky, as they may run counter to the primary trend.

Effective money management through protective stops is important to control the risk. The recommendation is typically valid for two trading sessions. Given the high underlying volatility, it is better not to carry the position overnight. The upside target has accordingly been placed close to the recommended entry price. It will not be optimal to set up options-based strategies for such short throwbacks.

BHEL: Buy the March futures contract if it trades above 754. The upside target range is 758-763.

Initiate the position with protective stop at 749. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 600 units. The open interest position as a percentage of the market-wide limit is approximately 15 per cent.

Oriental Bank: Buy the March futures contract if it trades above 297.50. The upside target range is 300-302.

Initiate the position with protective stop at 294. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 1200 units. The open interest position as a percentage of the market-wide limit is around 40 per cent.

SBI: Buy the March futures contract if it trades above 640. The upside price target range is 644-648.

Initiate the position with protective stop at 636. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 500 units. The open interest position as a percentage of the market-wide limit is around 25 per cent.

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

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