Consider going short on ACC, MRF

K.S. Badri Narayanan | Updated on January 30, 2011

ACC (Rs 981): Last week's carnage triggered a fresh selling in ACC, changing its outlook to negative. ACC now finds a crucial support at Rs 970, and a close below that could weaken it to Rs 858 first and then even to Rs 814. Only a close above Rs 1,134 would change the medium-term outlook positive for the stock. ACC faces an immediate resistance Rs 1,015 and the next at Rs 1,080.

F&O pointers: The ACC futures closed at Rs 981, a wide discount with respect to the spot close at Rs 992. This indicates fresh accumulation of short positions. The ACC March futures are trading at a wider discount. Options are not that active to discern any view. However, rollover to February series is quite healthy at 76 per cent.

Strategy: Consider going short on ACC February futures with a tight stop-loss at Rs 1,015 (stop-loss closing day basis).

MRF (Rs 6,191): The stock has been on the downtrend for quite sometime. The recent fall below the crucial support level turned even the long-term outlook negative for MRF. Only a close above Rs 7,880 would change the outlook to positive for the stock. The immediate support and resistance appear at Rs 5,600 and Rs 6,650. One more close below the Rs 6,150 would take it down to its next support level.

F&O pointers: This is among the less active counters in the futures segment. The MRF futures closed at a premium (Rs 6,191) to the spot (Rs 6,158). It witnessed unwinding of long positions on Friday, which dragged the counter further. None of the options are active.

Strategy: Consider going short on MRF February futures with tight stop-loss at Rs 6,220 (closing day basis, spot price) for an initial target of Rs 5,600.

Note: Risk-averse traders can stay away from both the strategies.

Feedback or queries (on positions) may be sent to > f&o@thehindu.co.in by Sunday noon. Replies will be published on Monday.

Published on January 30, 2011

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