Technical Analysis

Go long on Max Financial

| | Updated on: Jul 16, 2017
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Shares of Max Financial Services (₹600) rules at a crucial level. A close above ₹622 will re-confirm the positive outlook and ensure that the stock of Max Financial is heading towards ₹730. The stock finds immediate support at ₹567 and a close below ₹500 will change the outlook to negative. However, the chance of the stock heading towards new heights appears bright.

F&O pointers: The counter on Friday shed 1.75 lakh shares (or 3.5 per cent) open interest positions along with the rise in underlying share price. This indicates that a lot of traders preferred to book profits. Though trading in options is not very active, a little cue available suggests that Max Financial could face support at ₹580.

Strategy: Traders can consider going long on Max Financial Services futures. While stop-loss can be placed at ₹567 initially, it can be shifted to ₹600 if the stock opens and sustains the level on Monday. The initial target is ₹628. Traders with risk taking ability can aim for ₹655 (if willing to play thw waiting game).

Alternatively, traders can also buy ₹600-call option that closed at ₹15.55 on Friday. Consider exiting the position if the option premium falls to ₹5.5 or ₹30. The market lot for Max Financial Services contracts is 1,000.

Follow-up: Tata Global Beverages achieved the target.

Published on January 11, 2018

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