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I have a short on Coforge futures January contract at ₹6,387. Should I hold or exit? – Palani Shanmugam
Coforge (₹6,440): The stock price softened over the last week and is now hovering around ₹6,440 versus preceding week’s close of ₹6,592.7. Similarly, the January futures of Coforge is now trading near ₹6,440 compared with the previous week’s close of ₹6,616.65.
However, the uptrend is intact and the fall in price appears to be only a corrective one. Coforge futures (January series) has its 20-day moving average support at ₹6,300. Below this is a rising trendline support, which the contract could meet between ₹6,220 and ₹6,250. Subsequent support is at ₹6,000. Technically, unless the base at ₹6,000 is breached, we cannot call the price decline as a bearish reversal.
Considering the above factors, we suggest you exit the short position as the probability of a rally is high. You can reconsider shorting after the contract slips below ₹6,000.
For now, we recommend liquidating short and go long on Coforge futures if the price dips to ₹6,300. This is a short-term trade recommendation. So, target and stop-loss can be at ₹6,500 and ₹6,180 respectively.
Send your queries to derivatives@thehindu.co.in
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