Stock strategy: Bharti Airtel at crucial level

K.S. Badri Narayanan | Updated on September 10, 2011 Published on September 10, 2011



A conclusive close above Rs 415 would change the long-term outlook positive for Bharti Airtel.

Bharti Airtel (Rs 400): The stock is ruling near major resistance of Rs 415. A conclusive close above Rs 415 would change the long-term outlook positive for the stock.

The next resistance appears at Rs 436. The stock finds immediate support at Rs 372 and the crucial one at Rs 344.

F&O pointers: Bharti Airtel futures witnessed unwinding of long positions on Friday along with falling share price.

This indicates profit booking as the stock had a sharp run-up in recent times. Option trading, however, indicates a cautious signal with mild positive bias as accumulation of open interest in put option is much higher.

Strategy: Consider going long on Bharti Airtel September futures with a tight stop-loss at Rs 372 (spot price on a closing day basis) for an initial target of Rs 436.

Shift the stop-loss to Rs 415 if Bharti Airtel moves past Rs 415. Market lot of Bharti Airtel is 1,000.

Alternatively, traders can consider writing 360 September put, which closed around Rs 1.90 on Friday. Maximum profit in the strategy is the premium collected (i.e. R 1.9 * 1,000 market lot); loss, on other hand, could be unlimited if Bharti Airtel declines sharply.

Besides, writing option involves margin commitments. So this strategy is for traders who can afford to bear those risks. Hold this position for at least two weeks.

Traders willing to take a higher risk can even consider writing 380 September put on Bharti Airtrel that ended at Rs 4.65 on Friday.

Mercator Lines (Rs 25.7): The long-term and short-term outlook remains negative for Mercator Lines. The stock now finds a major resistance at Rs 37.5 and the immediate one at Rs 31.5.

Only a conclusive close above Rs 47 would negate the negative outlook on the stock.

One more close below Rs 25 would trigger a fresh downfall for the stock. In that event Mercator Lines could dip below its all-time low of Rs 21.

F&O pointers: Mercator Lines added fresh short positions on Friday. Options are not that active.

Strategy: Traders can consider going short on Mercator Lines with a stop-loss at Rs 31.5 for an initial target of Rs 25. Market lot is 8,000 units per contracts, so traders with high risk appetite can consider this.

Follow-up: Last week, we had advised traders to go short on NTPC and Unitech.

The stop-loss would have triggered for Unitech, while NTPC is still in-the-money.

Traders can continue to hold on to NTPC for a recommended target. We had also advised traders to write 180 call on NTPC. Traders can book full profit on this.

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

A conclusive close above Rs 415 would change the long-term outlook positive for Bharti Airtel.

Published on September 10, 2011

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.