Thanks to the recent strong rally, the long-term outlook turned positive for the stock of NTPC (₹251.6). The stock now finds an immediate support at ₹236 and ₹213. A close below the latter will change the short-term outlook negative.
On the other hand, if NTPC manages to stay above ₹213, it has the potential to hit a new peak around ₹285-290. We expect the stock to continue the momentum in the short term with intermittent corrections.
F&O pointers: NTPC November futures closed at ₹252.95 on Friday against the spot close of ₹251.60. The contract commands only a marginal premium over the spot price.
But on Friday, the counter witnessed a steady accumulation of open interests along with a rise in the stock price. This indicates the built-up of long positions on Friday. Option trading indicates that the stock could move in the ₹240-260 range.
Strategy: Consider going long on NTPC futures. Initial stop-loss and target can be at ₹236 and ₹262 respectively. This strategy is for traders who can withstand wild swings and can commit enough margin for futures. Risk-averse traders can stay away from this trade.
Stop-loss can be shifted to ₹250, if NTPC futures opens on a positive note and moves past ₹258. Traders who wish to play waiting games can keep the stop-loss at ₹236 and aim for ₹275 as target. Trail stop-loss based on your risk-taking ability.
Follow-up: SRF moved on expected lines. Traders can hold the position as suggested. Book profit on IRCTC call option.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading