I have sold Sterlite Industries and DLF June futures at Rs 99 and Rs 194 respectively. Please suggest me a strategy –Partibane .B

Sterlite Industries: The outlook remains weak for the stock. It finds immediate support at Rs 94 and resistance at Rs 104. A close below Rs 88 will trigger a fresh sell-off. In that event, Sterlite could see a sharp slide. Only a close above Rs 152 will change the long-term outlook positive.

F&O pointers: Rollover of open interest to next month series stood at 16 per cent. The counter witnessed accumulation of short position on Friday. Option trading indicates a neutral view with a positive bias.

Strategy: If you can afford, hold your short position with a stop loss at Rs 104.

DLF (Rs 194): The stock is likely to move in a narrow range of Rs 180-210 in the short-term. Only a break from this level will set a clear trend for DLF. A close below Rs 180 will take the stock towards its all-time low of Rs 165. The long-term outlook for DLF will change positive only if it moves above Rs 380-390.

F&O pointers: It witnessed a healthy rollover of about 39 per cent. Option trading indicates a movement between Rs 190 and Rs 200 for DLF.

Strategy: If you can afford, hold your position with a stop-loss at Rs 200. Shift the stop-loss to entry level if DLF opens on a weak note.

Should the stop-loss be based on the closing or the intraday price for options? - Anil Kumar.V

Generally in the cash market, stop-losses are advised on closing day basis. However, as the options market, particularly stock options, is not very liquid in India, it is advisable to keep the stop-loss on an intra-day basis.

NOTE: The analysis and opinion expressed in this column are based on F&O data available at this point of time and on technical analysis based on past price movements. There is risk of loss in trading.

(Feedback may be sent to blfuturesoptions@gmail.com)

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