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.

Reliance Industries: Sell July futures if it trades below 670. The downside target is 666-662. Place the protective stop at 675.

The open interest position is about 10 per cent of the market-wide limit.

The minimum order size is 600 units.

ONGC: Sell July futures if it trades below 925. The downside target is 920-915. Place the protective stop at 930.

The open interest position is about 10 per cent of the market-wide limit. The minimum order size is 300 units.

Reliance Energy: Sell July futures if it trades below 639. The downside target is 636-634. Place the protective stop at 644. The open interest position is about 25 per cent of the market-wide limit. The minimum order size is 550 units.

Bank of India: Sell July futures if it trades below 117. The downside target is 115-114. Place the protective stop at 119. The open interest position is about 10 per cent of the market-wide limit. The minimum order size is 1,900 units.

Jet Airways: Sell July futures if it trades below 1277. The downside target is 1274-1272. Place the protective stop at 1281. The open interest position is about 15 per cent of the market-wide limit. The minimum order size is 200 units.

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

(This article was published in the Business Line print edition dated July 16, 2005)
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