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B. Venkatesh

THE following strategies are based on Friday'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 futures price gaps down on Monday so as to trade 2-3 points below the recommended entry price, traders should enter the short position after the price breaks below the 5-minute low.

If the futures price gaps up and then triggers the recommended entry level, the protective stop should be placed at day's high at the time the position is initiated, if that price is higher 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.

Tata Tea: Sell June futures if it trades below 623. The downside target is 617-612. Place the protective stop at 629.

The open interest position is about 15 per cent of the market-wide limit. The minimum order size is 550 units.

Orchid Chemicals: Sell June futures if it trades below 336.50. The downside target is 334-332. Place the protective stop at 339. The open interest position is about 30 per cent of the market-wide limit. The minimum order size is 700 units.

HLL: Sell June futures if it trades below 162. The downside target is 160-159. Place the protective stop at 164. The open interest position is about 30 per cent of the market-wide limit. The minimum order size is 2000 units.

Hero Honda: Sell June futures if it trades below 602. The downside target is 594-589. Place the protective stop at 608.

The open interest position is about 10 per cent of the market-wide limit. The minimum order size is 400 units.

CESC: Sell June futures if it trades below 210. The downside target is 206-204. Place the protective stop at 214.

The open interest position is about 35 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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