Negative bias seen on Reliance Infra, Everest Kanto

mwrelinf.eps

I hold Feb 2011 Sesa Goa futures purchased at Rs 331. What would be a good strategy?Vijay R

Sesa Goa: The outlook remains neutral for Sesa Goa. The stock finds an immediate support at Rs 325 and a crucial one at Rs 295.

A close above Rs 331 would trigger a minor rally in the stock. In that event it can go up to Rs 345 or Rs 360, where Sesa Goa faces resistances. A conclusive close below Rs 295 would change the outlook to negative for Sesa Goa.

F&O pointers: The Sesa Goa Feb futures saw a marginal decline in open interest on Friday.

However, it closed in a premium with respect to the spot close of Rs 329.

Option trading indicates that Sesa Goa could move in the range of 320-340.

Strategy: Hold your position with a tight stop loss at Rs 325 (spot price on a closing day basis).

I bought Reliance Infrastructure Feb futures at Rs 725. Please suggest a strategy. Bhanuteja

Reliance Infra: The outlook remains negative for Reliance Infrastructure. The stock faces resistance at Rs 805 and support at Rs 705. A close below Rs 705 could weaken the stock to Rs 637.

As long it stays below Rs 805, the outlook would remain negative.

F&O pointers: Despite a bounce back on Friday, Reliance Infrastructure Feb futures witnessed unwinding of long positions, indicating a lack of confidence on the counter.

Options are not that active. A little cues available in option trading indicates a negative bias.

Strategy: Exit from your position.

I have a long position in Everest Kanto Cylinders Feb futures at Rs 84. Is it advisable to hold?R. Dhanasekaran

Everest Kanto Cylinders: The recent fall turned the outlook negative for the stock.

EKC now finds crucial support at Rs 78.5 and resistance at Rs 96.

A close below Rs 78.5 could take the stock towards Rs 65.

F&O pointers: The EKC futures closed on a par with the spot. It witnessed unwinding of long positions. This means heavy squaring-off positions, which helped the stock recover a bit on Friday. None of the options witnessed any activity.

Strategy: Exit from your position.

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&[email protected]

Published on January 30, 2011

Related

This article is closed for comments.
Please Email the Editor