Kindly advise me on Petronet LNG futures bought at Rs 163.— S. Priyanarayani
Petronet LNG: The long-term outlook remains positive for Petronet LNG as long it stays above Rs 132. However, in the short-term, the stock is ruling at crucial level. It finds resistance at Rs 169 and support at Rs 156.
I bought one lot of Dena Bank at Rs 126.50 and one lot of Axis Bank at Rs 1,385. Guide me with the technicals of short- and long-term supports. — C.K. Chandra Sekar
Dena Bank: The long-term outlook remains positive for Dena Bank, as long as it stays above Rs 84. The stock finds immediate support at Rs 112 and the resistace at Rs 136. If the stock sustains Rs 112, it has the potential to touch a new high.
F&O pointers: It added over three lakh shares in open interest on Friday. Option trading indicates Rs 120-130 range for Dena Bank.
Strategy: If you can afford, hold your long with a stop-loss at Rs 117.
Axis Bank: As long as it stays above Rs 961, the long-term outlook remains positive. Axis Bank finds immediate resistance at Rs 1,457 and support at Rs 1,288. If the stock manages to stay above Rs 1,210, it has the potential to scale a new high.
F&O pointers: The stock shed open interest along with fall in share price on Friday. Option trading indicates Rs 1,300 is crucial level.
Strategy: Hold your long with a stop-loss at your entry level.
Can I go long in CNX-IT or Infy as the results are around the corner for the latter? — Jayakumar Ganesan
Strategy: When one expects a wild swings in the underlying it is better to consider long-straddle or strangle on them, instead of pursuing a plain vanila futures strategy. Since options are not active on CNX IT, consider long straddle using 2,300 or 2,350 strikes of Infosys. Straddle is a strategy buying both the call and put of the same strike and same expiry. In this strategy, you may have to fork out about Rs 190 a contract. The maximum loss could be the premium paid (i.e. Rs 190), if Infosys stuck between Rs 2,400 and Rs 2,300. However, profits could be unlimited if Infosys swings wildly in any of the one direction.
I am carrying all short positions of Jan Nifty 5,800 call sold at 175 and Aurobindo Pharma futures at Rs 197. Kindly advise - Kishore Ailani
Nifty: The outlook remains positive for Nifty as long as it stays above 5875. Only a close below 5740 will change the medium term outlook negative for Nifty. In that event, it can go up to 5545. We expect the Nifty to remain in a narrow range in the ensuing weeks.
F&O pointers: The premium, which widened to about 45 points in December end, however narrowed down to 30 points, signalling unwinding of long positions. The Nifty futures shed open positions. Option trading, however, indicates a strong positive bias. Volatility remaining at a multi-year low is also bode well for bulls,
Strategy: It is better to exit your position and re-enter once Nifty enters corrective phase.
Aurobindo Pharma: The stock is ruling at a crucial level. It finds resistance at Rs 204. A close above that level will change the long-term outlook positive for the stock. It finds immediate support at Rs 190, and a close below has the potential to drag the stock to Rs 174.
F&O pointers: It shed open interest along with fall in share price, indicating long unwinding. Options are not that active. A little cue indicates negative bias.
Strategy: If you can afford hold your short with a stop-loss at Rs 204 and shift it to your entry level, if Aurobindo Pharma falls below that level.
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.
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