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Can I buy SBIN March futures? What is your outlook?
Sriram Kumar
The stock of State Bank of India (SBIN) has declined considerably since the beginning of this year. Year-to-date, it has lost a little over 15 per cent. Although the price region of ₹500-520 is a good support band, at this juncture, we do not see any signs of a bullish reversal.
Therefore, ideally, it is better not to go long or short on SBIN March futures.
However, if you are a high-risk appetite trader, you can risk buying March futures. Rather than buying at the current level of ₹523, wait for a dip to ₹510 and then go long to reduce the risk. Place a stop-loss at ₹495. Stick to the stop-loss strictly, as a breach of the support at ₹500 can intensify the sell-off.
After buying, when the stock rises and touches ₹535, move the stop-loss to ₹520. Exit the longs when price hits ₹550 – a resistance level. Fresh longs thereafter can be initiated if the hurdle at ₹550 is decisively broken. Above ₹550, the nearest resistance is at ₹600.
Nevertheless, we reiterate that this trade is risky in terms of the chances and the time taken for a recovery in price.
Send your queries to derivatives@thehindu.co.in
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