I’ve a long position in Jindal Steel futures. Shall I hold or exit? – Palani Shanmugam
Jindal Steel & Power (₹940): The stock has gained nearly 5 per cent so far this week. While the stock depreciated between June 2024 and January 2025, it has been in an uptrend since February.
The structure of the price action over the last year on the daily chart shows a bullish inclination. That is, the stock was making lower highs and lower lows between June last year and January this year. However, the stock has been making higher highs and higher lows since February, indicating a potential shift in trend.
The weekly chart shows that an inverted head and shoulder, though yet to be confirmed, is in formation. A breakout of ₹985 will confirm the same.
As it stands, we expect the stock to see a rise to ₹985. A breakout of this, which is likely to occur, can add more strength to the bulls. In this case, the share price of Jindal Steel & Power can appreciate to ₹1,050 in the coming weeks.
The positive trend will be invalidated if the stock price falls from the current level of ₹940 and slips below the support at ₹880.
Coming to the futures contract, the July series of Jindal Steel is now hovering around ₹950. It rebounded from the support at ₹890 a week ago. Going ahead, it is likely to rally to ₹990, a resistance. We expect the contract to break out of this barrier and move up to ₹1,050 in the short-term. Only a breach of the support at ₹890 will change the outlook negative.
Given the above factors, you can hold the long position in Jindal Steel futures (Jul) (₹950). But place a stop-loss at ₹875. When the contract touches ₹990, revise the stop-loss to ₹930. Tighten the stop-loss further to ₹990 when the contract touches ₹1,025. Book profits at ₹1,050.
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