Aban offshore in rough weather

K.S. Badri Narayanan | Updated on November 21, 2017



I have a short position on Tata Power at Rs 95.15. Shall I hold it average at higher levels? - Sivaram Krishnan

Tata Power: The stock has been in a range of Rs 145 and Rs 85 for quite long time. A close above Rs 140 will change the long-term outlook to positive while a close below Rs 85 will confirm the downtrend. Immediate resistance appears at Rs 106. A conclusive close above resistance could lift Tata Power to Rs 121. Immediate support for the stock appears at Rs 96.

F&O pointers: The stock added fresh longs on Friday. Rollover open interests to next month series stood at about 18 per cent. Options are not that active.

Strategy: Exit and re-enter once it takes a clear direction. Cost averaging seldom works in the derivative segment.

I have a long position of Tata Steel and Reliance Infrastructure futures at Rs 410 and Rs 535. Please suggest me the strategies - Partibane B.

Tata Steel: The stock is hovering around crucial level. One more conclusive close above Rs 410, will take the stock towards Rs 460. A close above will change the long-term outlook positive. However, fails to sustain the current rally will weaken it once again towards Rs 350.

F&O pointers: Rollover open interest to next series remains weak at 16 per cent. Option trading indicates a neutral view.

Strategy: Hold your long with a stop loss at Rs 410 if it manages to close above that level (spot price on a closing day basis). Otherwise, the stop-loss should be placed at Rs 390.

Reliance Infrastructure: The outlook turned positive for the stock after a recent surge. The stock faces crucial resistance at Rs 597 while a close below Rs 513 will weaken it further towards Rs 493 and a close below Rs 468 will change the outlook negative for Reliance Infrastructure.

F&O pointers: The counter witnessed a rollover of 17 per cent to October series. Option trading indicates strong support at Rs 520.

Strategy: Hold your long with a stop loss at Rs 513.

Aban Offshore has closed at Rs 430. In the last few sessions it has gone up with increasing open interest. Call option of 440 too suggests some accumulation. I am holding at price of Rs 422. Can I expect the stock to reach Rs 440, again being this last series for this stock? - Kishore Lekhwani.

Aban Offshore: If the current trend sustains, the stock could go up to Rs 436. A close above that will change the long-term outlook positive for the stock. It finds immediate support at Rs 410 and the crucial one at Rs 375. A close below that will change the long-term outlook negative.

F&O pointers: As you mentioned, it had accumulated open positions in the futures segment. Options are not active.

Strategy: This being the final settlement for Aban Offshore in the F&O segment, it is better to exit from the counter, as it will see heightened volatility. All open positions will have to be squared-off ahead of expiry. Lack of writers could, on the other hand, may keep the stock afloat.

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 a risk of loss in trading.

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Published on September 23, 2012

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