Technical Analysis

Outlook turns positive for NMDC

KS BADRI NARAYANAN | Updated on January 17, 2018 Published on July 03, 2016

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The short-term outlook turned positive for NMDC (₹95) though the long-term outlook still remains negative. The stock finds immediate resistance at ₹98.4 and key support at ₹85.3. If it sustains the current uptrend, the stock can move up to ₹115 in the medium term.

But a close below ₹85 will change the outlook negative for NMDC. In that event, the stock can test the new low in a decade; its new low since 2007 is at ₹75.2.

F&O pointers: The NMDC July futures added fresh longs on Friday; over three lakh shares were added in open interest.

Strategy: Traders can consider going long on NMDC futures. While a stop loss can be placed at ₹85.3 initially, it can be shifted to ₹98.4 once the stock conclusively closes above that level. Profits can be booked at ₹106.

Traders who can withstand risk and volatility, can roll the position for few more series for a target of ₹129 and then to ₹165. Alternatively, they can consider buying ₹97.5-call closed at ₹1.8.

While the total loss could be ₹10,800 (as market lot is 6,000), profit can be unlimited if the stock moves sharply. Hold the position for at least two weeks with a stop-loss at ₹0.75 or book profits if the premium rises to ₹3.5.

Published on July 03, 2016
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