Financial Daily from THE HINDU group of publications
Thursday, Apr 28, 2005
Financial Daily from THE HINDU group of publications Thursday, Apr 28, 2005 |
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Markets
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Derivatives Markets Columns - On the hedge Outlook may turn positive for HCL Tech, Guj Ambuja B. Venkatesh
THE following strategies are based on Wednesday's trading in the derivatives segment on the NSE. The recommendations on Gujarat Ambuja and ACC are valid for intra-day trades only. The target levels and protective stops have accordingly being placed near the recommended entry price. For this reason, no options-based strategies are available on these two positions. HCL Tech: The May futures contract closed at 338.75. The outlook may turn positive if the May contract trades above 344.20. The upside target range is 356-361. Buy May futures after it trades above 344.20. Initiate the position with protective stop at 332. Trail the stop to control the downside risk. The margin on the futures position is approximately 19 per cent of the contract value. The minimum order size is 650 units. The open interest position is about 10 per cent of the market-wide limit. No alternative strategies are available, as options on the stock are not actively traded. Gujarat Ambuja: Buy May futures after it trades above 417.15. The upside target range is 422-425. Initiate the position with protective stop at 414. The minimum order size is 550 units. If the contract gaps up by 2-3 points, traders should wait for five minutes and enter the position only after the contract breaks the 5-minute high. ACC: Buy April futures after if it trades above 362. The upside target range is 365-367. Initiate the position with protective stop at 358. The minimum order size is 750 units. Note that the April futures contract expires on April 28. For this reason, it may not be advisable to trade this position if the contract gaps up to trade 2-3 points above the recommended entry price. (The opinion expressed in this column is based on technical analysis. There is risk of loss in trading)
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