The Hindu Business Line : Nifty futures faces strong resistance at 5245

I have shorted Nifty March futures at 4881. So far, I have incurred a loss of Rs 10,000 and I can bear another Rs 10,000 before the expiry of March series. Do you think the Nifty will touch 4900/4950 so that I can exit? – Mr Harkishan Khatnani

Nifty futures (5087): Nifty futures faces crucial resistance at 5245 and an immediate support at 5010. A convincing close below 5010 could weaken it to 4750.

F&O pointers: Nifty futures closed in discount at 5087 with respect to the spot close of 5088.70.

This indicates accumulation of short positions, expecting a fall in Nifty futures after the recent surge.

However, cooling off volatility index presents a positive outlook on Nifty.

Among the options, 5000 put and 5100 call have highest number of open interest, suggesting that Nifty could move in this range.

Apart from this, Nifty 4800 put has 61.41 lakh shares in open interest, indicating strong support at this level.

Strategy: As you can afford another Rs 10,000 as loss, keep the stop loss at 5245 and hold your short position.

There is a possibility of Nifty futures correcting, and if it dips below 5010, shift your stop loss to that level and aim for 4850-4880.

I bought Mercator Lines March futures at Rs 59.90. Please recommend the target and stop-loss. – Mr Saibabu

Mercator Lines: As long as it stays above 47, the outlook for the stock appears positive. However, the stock is hovering around the crucial resistance of 60.

If it fails to breach this level on a closing day basis, it could weaken to the support zone.

It appears the stock could move in a narrow range in the short term.

F&O pointers: The stock could hold on to the gains, due to unwinding of long positions on Friday. Options are not active to discern any view.

Strategy: Keep the stop loss at 55 (if you can afford), and hold the position for a target of 68-70.

I am long on Tata Motors 820 call @ 18.15 and short on 860 call @ 6.10 (March Series). Please advice the level at which I should exit. – Mr M.N. Raju, Tirupati

Tata Motors (794): The stock finds strong resistance at 840. A close below 784 could weaken it to 745 and 695. However, as long as it stays above 415, the outlook is positive only for the stock.

F&O pointers: Tata Motors shed over 5 per cent in open interest position, signalling profit taking.

While calls accumulated open position, puts shed. This indicates limited upside potential for the stock.

Strategy: You can exit from the strategy.

I would appreciate your view on Mphasis, which I bought at 692 (March futures). – Mr Vijaya Kumar Raghavan

Mphasis (673.9): The short-term outlook appears negative as it dips below the crucial support level of 675, which is very close from current level.

If the current trend sustains, the stock could reach 645. Only a close above 745 would negate the negative outlook.

Options are not active while the stock futures shed open position on Friday.

Strategy: Consider holding the position, with a stop loss at 662 (if you can afford) for a target of 708-710.

K.S. Badri Narayanan

NOTE: The analysis and opinion expressed in this column are based on F&O data available at this point of time and on technical analysis based on past price movements. There is risk of loss in trading.

Feedback may be sent to f&o@thehindu.co.in

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