The Hindu Business Line : Small reversal likely in Tata Power, Reliance Cap

THE following strategies are based on Tuesday's trading in the derivatives segment on the NSE. These strategies are constructed to take advantage of small reversal in futures prices.

The positions may run counter to the primary trend. Hence, protective stops are important.

If the futures' price gaps down on Wednesday so as to trade 2-3 points below the recommended entry price, traders should enter the position after the price breaks below the 5-minute low.

Likewise, if the futures' price gaps up and then triggers the recommended entry level, the protective stop should be placed at the day's high at the time the position is initiated ( when that price is higher than the stop-loss level recommended below).

Option-based strategies are not available on these positions because the price targets are not far away from the recommended entry levels.

SRF Sell June futures if it trades below 168. The downside target is 164-160. Place the protective stop at 172.

The open interest position is about 20 per cent of the market-wide limit. The minimum order size is 1,500 units.

Tata Power Sell June futures if it trades below 381. The downside target is 379-377. Place the protective stop at 384.

The open interest position is about 10 per cent of the market-wide limit. The minimum order size is 800 units.

Tata Tea Sell June futures if it trades below 601. The downside target is 598-595.

Place the protective stop at 605. The open interest position is about 20 per cent of the market-wide limit. The minimum order size is 550 units.

PNB Sell June futures if it trades below 406. The downside target is 402-400.

Place the protective stop at 409. The open interest position is about 20 per cent of the market-wide limit. The minimum order size is 600 units.

Reliance Capital Sell June futures if it trades below 226. The downside target is 224-222.

Place the protective stop at 228. The open interest position is about 30 per cent of the market-wide limit.

The minimum order size is 1,100 units.

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

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