Financial Daily from THE HINDU group of publications
Tuesday, Jun 21, 2005
Financial Daily from THE HINDU group of publications Tuesday, Jun 21, 2005 |
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Markets
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Derivatives Markets Columns - On the hedge Intra-day longs may pay off in Tata Motors, NDTV B. Venkatesh
THE following strategies are based on Monday'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. Protective stops are, hence, important. If the futures price gaps up on Monday to trade 2-3 points above the recommended entry price, traders should enter the position after the price breaks above the 5-minute high. If the futures price gaps down and then triggers the recommended entry level, the protective stop should be placed at day's low at the time the position is initiated, if that price is lower than the stop-loss level recommended below. Option-based strategies on these positions will not be optimal because the price targets are not far away from the recommended entry levels. Bharat Electronics: Buy June futures if it trades above 724.50. The upside target is 728-731. Place the protective stop at 721. The open interest position is about 10 per cent of the market-wide limit. The minimum order size is 550 units. Colgate: Buy June futures if it trades above 228.25. The upside target is 230-232. Place the protective stop at 225. The open interest position is about 15 per cent of the market-wide limit. The minimum order size is 1050 units. Tata Motors: Buy June futures if it trades above 403. The upside target is 405-406. Place the protective stop at 400. The open interest position is about 15 per cent of the market-wide limit. The minimum order size is 825 units. Tata Power: Buy June futures if it trades above 366. The upside target is 370-371. Place the protective stop at 363. The open interest position is about 10 per cent of the market-wide limit. The minimum order size is 800 units. NDTV: Buy June futures if it trades above 191.50. The upside target is 195-197. Place the protective stop at 188. The open interest position is about 25 per cent of the market-wide limit. The minimum order size is 1100 units. (The opinion expressed in this column is based on technical analysis. There is risk of loss in trading.)
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