Technical Analysis

Future Perfect

KS BADRI NARAYANAN | Updated on January 17, 2018 Published on August 28, 2016


Go long on Bharti Airtel

The Bharti Airtel (₹344) stock rules at a crucial level. The short-term outlook will turn negative if the stock fails to sustain above ₹336. The medium-term outlook will also turn negative if Bharti Airtel declines below ₹305.

The stock could move within a range of ₹310-385 in the medium term. A close above ₹385 will change the medium-term outlook to positive.

In such an event, the stock can head towards ₹550.

F&O pointers: It added 5.3 lakh shares in open interest. Option trading indicates a range of ₹340-360.

Strategy: Traders with high-risk appetite can consider going long on Bharti Airtel futures with a stop loss at ₹336 for a target of ₹367.

Traders with less risk appetite can consider bull-call spread on Bharti Airtel. This can be initiated by buying ₹340-call and simultaneously selling the ₹360-call. They closed with a premium of ₹13 and ₹4.7 respectively. It will incur an initial outflow of ₹12,450 (market lot 1,500), which would be the maximum loss.

This will happen if the stock closes at or below ₹340. But a profit of ₹16,500 is possible if Bharti Airtel manages to close at or above ₹360. Traders could consider exiting if the loss mounts to ₹5,000. Hold the position till expiry.

Follow-up: Hold Nifty 8600 Nifty call option, for at least two weeks, while Coal India strategy would have resulted in losses.

Published on August 28, 2016
This article is closed for comments.
Please Email the Editor