Financial Daily from THE HINDU group of publications
Saturday, Jul 02, 2005
Financial Daily from THE HINDU group of publications Saturday, Jul 02, 2005 |
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Markets
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Derivatives Markets Columns - On the hedge Small reversal likely in Cipla, i-flex 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. Cipla: Sell July futures if it trades below 323.50. The downside target is 321-319. Place the protective stop at 327. The minimum order size is 1000 units. Glaxo: Sell July futures if it trades below 865. The downside target is 855-847. Place the protective stop at 873. The minimum order size is 300 units. i-flex: Sell July futures if it trades below 834. The downside target is 828-822. Place the protective stop at 838. The minimum order size is 300 units. Tata Power: Sell July futures if it trades below 380. The downside target is 378-377. Place the protective stop at 383. The minimum order size is 800 units. (The opinion expressed in this column is based on technical analysis. There is risk of loss in trading.)
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