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I am holding two short positions in Sterlite Tech, entered at Rs 57 and at Rs 67.40. I am also short on Srei Infra at Rs 45. What should I do now that prices of these stocks have risen? — Kishore Ailani
Sterlite Technologies (68.9): The stock has shown a strong resilience after registering its 52-week low at Rs 44.6. It now faces strong resistance at Rs 77 and major support at Rs 52. The immediate resistance and support levels are Rs 72 and Rs 64.5 respectively. A solid close above Rs 77 could trigger a fresh rally in the counter. Having surged sharply, the stock could see a correction, despite the overall outlook is positive.
F&O pointers: The counter saw a decent rollover of 37 per cent in open interest to May series. Options are not active.
Strategy : If you can afford, consider holding your positions with a tight stop loss at Rs 72. It is not advisable to do a cost-averaging in F&O.
Srei Infra: The stock finds immediate resistance at Rs 60 and support at Rs 51. A close below the support level could drag the stock to Rs 45, where it finds a major support.
F&O pointers : Rollover of open interest is negligible. Options are not active.
Strategy: Exit the counter.
I wrote (sell) one call of Nifty 5,900 (April series) at Rs 60. What should I do now? — M.A. Samuel
Nifty: The outlook remains positive for Nifty, as long as it stays above 5,487. If the current rally sustains, Nifty can touch 6,020-6,025 and even 6,130. The immediate support levels appear at 5,710 and 5,585.
F&O pointers : Rollover of open interest is around 15 per cent. Option trading indicates positive bias for Nifty as puts added more open positions even as calls witnessed a drop in open interest.
Strategy : Since your position is already in-the-money, albeit marginally, it is better to exit.
I have 3,000 shares of Neyveli Lignite Corporation Ltd at an average cost of Rs 160 a share. How can I reduce the average cost? — Somanath Sahoo, Gangtok
Neyveli Lignite Corp : The stock is currently stuck in a range of 100-130. Only a close above Rs 140 would change the outlook to positive while a drop below Rs 92, its crucial support, could weaken the stock to Rs 70.
Strategy : Ideally you should be writing deep out-of-the-money (OTM) calls or strangles (selling of deep OTM calls and puts). Since options are not active on NLC, it is not possible to use F&O.
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 or > blfuturesoptions@gmail.com
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