Consider going long in Ranbaxy

K.S. Badri Narayanan | Updated on August 03, 2013 Published on August 03, 2013

Ranbaxy Laboratories (Rs 273.2): The long-term outlook remains negative for Ranbaxy Laboratories, as long it stays below Rs 438. However, in the short-term, it is likely to show some recovery. The stock now finds support at Rs 243 and immediate resistance is at Rs 325 and the next one at Rs 386. The possibility of the stock rising to its immediate resistance appears bright.

F&O pointers: Ranbaxy August Futures witnessed unwinding of long positions on Friday despite it moving up over 4 per cent. Option trading indicates Rs 300 as a crucial level for the stock.

Strategy: Traders can consider going long in Ranbaxy with a stop-loss at Rs 253 (Friday’s low) for an initial target of Rs 325. If the stock opens on a positive note and sustains above Rs 280, shift the stop-loss to that level.

Alternatively, traders could also consider going long in Ranbaxy 300 call that closed with a premium of Rs 7.75. While the maximum loss in this strategy is the premium paid, the profit could be unlimited if Ranbaxy surges sharply. Market lot is 500 shares for a contract.

Follow-up: Last week, we had advised traders to short Gail India. It moved on expected lines. Traders could consider holding the positions with a revised stop-loss of Rs 309.

( Note: Feedback or queries (on positions) may be sent to blfuturesoptions@gmail.com by Sunday noon. Replies will be published on Monday.)

Published on August 03, 2013
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