Financial Daily from THE HINDU group of publications
Tuesday, Jul 12, 2005
Financial Daily from THE HINDU group of publications Tuesday, Jul 12, 2005 |
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Markets
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Derivatives Markets Columns - On the hedge Intra-day short on ACC, Titan may pay off 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 futures price gaps down on Tuesday so as to trade 2-3 points below the recommended entry price, traders should enter the short position after the price breaks below the five-minute low. 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, 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. ACC: Sell July futures if it trades below 413. The downside target is 410-407. Place the protective stop at 418. The open interest position is about 25 per cent of the market-wide limit. The minimum order size is 750 units. IVRCL Infrastructure: Sell July futures if it trades below 569. The downside target is 563-560. Place the protective stop at 575. The open interest position is about 20 per cent of the market-wide limit. The minimum order size is 400 units. SRF: Sell July futures if it trades below 275. The downside target is 271-266. Place the protective stop at 280. The open interest position is about 65 per cent of the market-wide limit. The minimum order size is 1,500 units. Titan Industries: Sell July futures if it trades below 504. The downside target is 493-485. Place the protective stop at 512. The open interest position is about 40 per cent of the market-wide limit. The minimum order size is 800 units. ICICI Bank: Sell July futures if it trades below 439. The downside target is 435-433. Place the protective stop at 444. The open interest position is about 15 per cent of the market-wide limit. The minimum order size is 700 units. (The opinion expressed in this column is based on technical analysis. There is risk of loss in trading.)
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