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I have bought Britannia November futures at ₹5,490.80. Should I exit with a loss or average?
Palani Shanmugam
Britannia Industries (₹4,915.60): The stock tumbled last week, losing over 14 per cent. While the chart shows strong bearish momentum, it is now near a crucial trendline at ₹4,900, which has the potential to stop further decline in price.
However, if this is breached, the price can extend the downswing to ₹4,500, a notable support.
Since the stock is now trading near a support, we cannot be certain about bullish trend reversal. But there is a good chance for a minor rally, possibly to the resistance band of ₹5,250-5,350. Only a decisive breakout of ₹5,350 can bring back the bullish momentum.
A potential move to the aforementioned price band in the underlying stock means the futures contract can also see a rally. Britannia November futures, which closed at ₹4,917.15 last week can see an upside to ₹5,250-5,300. But a recovery above this price region before the end of the current expiry is less likely.
Given the above factors, you can hold the long with a stop-loss at ₹4,885. But exit the position when the November contract touches ₹5,250.
Send your queries to derivatives@thehindu.co.in
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