Technical Analysis

GAIL India turns weak

| | Updated on: Jun 25, 2017
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The outlook for GAIL India (₹355.7) is negative. The stock finds support at ₹329 and appears to be heading towards that level. A close below ₹312 will change the long-term outlook to negative. However, only a close above ₹386 will change the outlook to positive. In such a scenario, the stock has the potential to reach new peaks.

F&O pointers: GAIL India witnessed about 12 per cent rollover to July series. Heavy build-up in put options, in comparison to calls, signals that the stock may face strong resistance for an upmove.

Strategy: Traders can consider shorting GAIL India, with a stop-loss at ₹369. The stop-loss can be shifted to ₹363 and then to ₹351. The target for the stock is ₹329. We advice traders to exit at this level, as GAIL India may stage a sharp bounce back from this level. As the market lot is 2,000 shares per contract, this strategy is for traders who can withstand wild swings. Alternatively, traders can consider buying ₹350-put of July month, closed with a premium of ₹7.60. Consider exiting if the option premium rises to ₹12 or falls to ₹3.

Follow-up: Hold MCX long positions, as suggested last week.

Published on January 12, 2018

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