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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.
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