Outlook remains negative for Tata Steel

I have long positions in Hindalco at 138, BEML at 531, Tata Steel at 431, McLeod Russel at 226 and Alstom Projects at 440. Please suggest the outlook for the stocks . – Sarvesh

Hindalco (Rs 124): The outlook remains negative for the stock. It finds an immediate resistance at Rs 138 and support at Rs 105. A conclusive close below that could weaken it to 85 while it faces next resistance at Rs 156.

F&O pointers : The stock saw a rollover of just 16 per cent. Most of the rollovers were on the positive side. Option trading indicates a limited downside, as 120 and 110 puts witnessed heavy accumulation of open interest.

Strategy: Exit. If you can afford, hold your position with a stop loss at Rs 106.

BEML (Rs 488): The outlook remains negative for the stock. It finds an immediate support at Rs 470 and the next one at Rs 438. Resistances are placed at Rs 516 and at Rs 593.

F&O pointers : Rollover stood at just 12 per cent. Options did not see any activity. Even the farther month option witnessed a low activity.

Strategy: Hold your long position with a stop loss at Rs 470 (spot price on a closing day basis). If BEML opens on positive note shift the stop loss to Rs 485.

Tata Steel (Rs 393): The stock is now vulnerably placed as it has breached important support levels. It now finds a resistance at Rs 427 and the next one at Rs 443. While the immediate support appears at Rs 373, a conclusive dip below that could weaken it to Rs 297.

F&O pointers: The counter witnessed a healthy rollover of 33 per cent in open interest to December series. Option trading indicates that the stock could dip below Rs 380.

Strategy: Exit on any bounce back, as only a close above Rs 427 will give some momentum to the stock.

McLeod Russel (Rs 224): The outlook remains negative for the stock. It now finds crucial support at Rs 203 and a conclusive close below that could drag McLeod Russel to Rs 182. The stock finds a resistance at Rs 246.

F&O pointers: The counter did not see much rollover. Options also did not evoke any response.

Strategy: Hold your long position with stop loss at Rs 204 and switch the stop loss to your entry point if the stock opens above that level.

Alstom Projects (Rs 443): After moving a narrow range, the stock turned weak. It now finds resistance at Rs 527 and support at Rs 427. A close below that could weaken the stock towards Rs 333.

F&O pointers : Rollover is low while options were not traded.

Strategy: Hold your position with a stop loss at Rs 427.

I have sold Nifty at 4900. Please suggest if holding it or withdrawing it would be more profitable. -Partibane .B

Nifty : The outlook is negative for Nifty. Only a close above 5607 will change the long-term outlook positive. It now finds an immediate resistance at 4996 and the support at 4860. A close below the support could drag Nifty to 4720, which is a crucial one. On the upside, it faces resistances at 5056 and at 5147.

F&O pointers: The Nifty saw a rollover of 24 per cent. Most of the addition in the December series seems to be on the short side. Option trading indicates that 4700 could act as support at put witnessed heavy accumulation.

Strategy: Hold your short position with stop loss at 4996.

I have purchased Nifty Dec 11 futures @ 4887. My target is 5050. Please suggest stop-loss and suitable strategy . - V. Sankar

Strategy : Hold long position with a stop loss at 4860.

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.

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