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B. Venkatesh

THE following strategies are based on Tuesday's trading in the derivatives segment on the NSE. These strategies are constructed to take advantage of short reversals in the futures price. The positions could run counter to the primary trend. Protective stops are, therefore, important to control the position risk.

The recommendations are typically valid for two trading sessions. However, given the high volatility in the underlying, it is better not to carry the positions overnight. The target levels are accordingly placed near the recommended entry level.

Setting up options-based strategies is not optimal because the upside potential is limited.

Maruti Udyog: Buy April futures if it trades above 403. Initiate the position with protective stop at 399. The upside target range is 409-411.

The margin on the futures position is approximately 16 per cent of the contract value. The minimum order size is 800 units. The open interest position as a percentage of the market-wide limit is about 15 per cent.

Tata Steel: Buy April futures if it trades above 383.50. Initiate the position with protective stop at 379. The upside target range is 389-391.

The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 675 units.

The open interest position as a percentage of the market-wide limit is about 40 per cent.

Tata Power: Buy April futures if it trades above 345. Initiate the position with protective stop at 341. The upside target range is 354-357.

The margin on the futures position is approximately 18 per cent of the contract value. The minimum order size is 800 units.

The open interest position as a percentage of the market-wide limit is about 15 per cent.

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

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