The Hindu Business Line : Outlook may turn negative for Reliance Ind, HDFC

Reliance Industries: The May futures contract closed at 545.50. The outlook may turn negative if it trades below 539.50. The downside target range is 515-512.

Sell May futures if it trades below 539.50. Initiate the position with protective stop at 550. Trail the stop to control the upside risk. 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 is about 15 per cent of the market-wide limit. Farther-month options are not actively traded yet. Traders cannot, therefore, set up alternative strategies with options. It may be worth buying the April 520 puts instead. This option can be bought for one point. Note that the option will expire on April 28.

HDFC: The May futures contract closed at 729.75. The outlook may turn negative if it trades below 720.50. The downside target range is 680-675.

Sell May futures if it trades below 720.50. Initiate the position with protective stop at 735. Trail the stop to control the upside risk. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 300 units. The open interest position is about 5 per cent of the market-wide limit. Alternative strategies are not 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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