Technical Analysis

Future Perfect: Bright outlook for Power Grid

| Updated on: Oct 15, 2017
image caption

Power Grid Corporation of India (₹205.6) rules at a crucial level. The stock finds an immediate support at ₹198 and a close below that will change the short-term outlook negative. If the stock fails to sustain above ₹198, it has the potential to fall further and reach ₹166. Power Grid finds an immediate resistance at ₹212 and a conclusive close above this will trigger a fresh rally in the stock that could take it to a new heights — could touch ₹255 initially. The long-term outlook remains positive for Power Grid Corporation of India.

F&O Pointers: The Power Grid Corporation October futures added 1.6 lakh shares on Friday. However, over week-on-week, the open interests remained flat. Option trading indicates a range-bound movement of ₹200-₹210 for the stock.

Strategy: Traders could consider going long on Power Grid Corporation futures with a stop-loss at ₹198 initially. If the stock opens strongly and closes above ₹212, the stop-loss can be shifted to this level. While traders can aim for an initial target of ₹236, those who have high-risk appetite can even aim for ₹255. This strategy is for traders who can bear the risk, as they could suffer loss heavily on sharp swings.

Conservative traders could consider buying ₹210-call, which closed at ₹1.25. With market lot is 4,000 it will cost ₹5,000, which could be the total loss. This will happen if Power Grid fails to sustain above ₹210 level. However, the profit potentials are high if the stock surges sharply within this series.

Follow-up: Hold Reliance Capital positions; the stock moved on expected lines.

Published on January 08, 2018

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you