I have bought ITC August futures at Rs 255. Please suggest strategy. Rajesh Dalvi

ITC: The long-term positive outlook remains intact for ITC as long as it stays above Rs 210. The stock is near an all-time high of Rs 260, which it touched a month ago. If the rally sustains, the stock could touch Rs 275-280. It finds immediate support at Rs 240-42. A close below that has the potential to drag ITC down to Rs 220. Only a close below Rs 194 will change the long-term outlook negative.

F&O pointers: The ITC August futures witnessed unwinding of long positions on Friday. This indicates that traders are reluctant to carryover their long positions, and prefer to book profits. Option trading also indicates a positive bias as 250 and 260 calls saw unwinding of open interests. On the other hand, 240 and 260 puts witnessed accumulation of open positions, indicating the strong emergence of put writers.

Strategy: If you can afford, hold with a stop loss at Rs 242. If ITC opens on positive note, shift the stop loss to Rs 252 (or your entry point).

I have gone long on Tata August futures at Rs 208. Please advise. - Chandrakala Bane, Mumbai.

Tata Motors: The outlook has turned negative for Tata Motors. It finds immediate resistance at Rs 221 and the next one at Rs 245. Support is placed at Rs 194 and at Rs 176.

F&O pointers: Despite a surge on Friday, Tata Motors August futures shed 26 lakh shares on Friday. Option trading indicates that 240 – where the put writers have emerged - could be tough resistance to break.

Strategy: Hold your position with a stop loss at Rs 194. Shift the stop loss to Rs 221, if it crossed that level.

I hold August futures of Dena Bank at Rs 96. Now it is trading at Rs 88. I want to know support and resistance levels. Should I hold or exit? - Giri Daran

Dena Bank: The outlook remains neutral for Dena Bank. The stock is expected to move in the range of Rs 100 and Rs 76. It finds immediate resistance at Rs 97 and support at Rs 83.

F&O pointers: The Dena Bank futures added fresh short positions on Friday. It added 13.88 lakh shares. Options indicate a neutral view as both calls and puts accumulated open positions.

Strategy: Hold your long position with a stop loss at Rs 83 (Spot price on a closing day basis).

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; blfuturesoptions


(This article was published in the Business Line print edition dated July 30, 2012)
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