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B. Venkatesh

THE following strategies are based on Friday's trading in the spot and the derivatives segments on the NSE:

ITC: The stock closed at Rs 1280 in the spot market. The outlook may turn positive if the stock trades above Rs 1,305. In the event, the stock could move to Rs 1,369.

Buy March futures after the stock trades above Rs 1,305 in the spot market. Initiate the position with spot-market-stop-loss at Rs 1,278. The position has to be traded with trailing stops to control the downside risk. The margin on the futures position is approximately 17 per cent of the contract value. The minimum order size is 300 units. No alternative strategies are available, as options on the stock are not actively traded.

Traders with shorter trading horizon can initiate long February futures after the stock trades above Rs 1,280. The upside price target would be Rs 1,300 and the initial protective stop would be Rs 1,273. This recommendation is valid for only two trading sessions from the date of initiation. If profits are not taken or the position is not stopped, the contract has to be closed at the end of the third day.

Tata Tea: The stock closed at Rs 543 in the spot market. The outlook may turn positive if the stock trades above Rs 544.25. In the event, the stock could move to Rs 565.

Buy March futures after the stock moves above Rs 544.25 in the spot market. Initiate the position with spot-market-stop-loss at Rs 536. The position has to be traded with trailing stops. Otherwise, the downside risk will be high, as the contract-multiplier is 550 units. The margin on the futures position is approximately 16 per cent of the contract value. No alternative strategies are available, as options on the stock are not actively traded.

(The opinion expressed in this column is based on technical analysis. There is risk of loss in trading.)

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