Holding ZEE September futures at ₹261.90 and Bharti Airtel September futures at ₹730.35. Can I hold it till expiry? Should I keep any stop loss? I can support the MTM for these positions until a fall of say 3-4 per cent. Do we need to consider the Indian GDP data expected on August 31? — Sundararajan.
We assume that you hold long positions on futures of both the stocks.
ZEE (₹255): The stock of Zee Entertainment Enterprises (ZEE) has been in an uptrend for nearly two months. It is currently trading near the 21-day moving average support and just below it, there is rising trendline support as well. But the daily RSI is showing some weakness in the form of a bearish divergence and the September futures is at a discount to the underlying.
So, if the stock slips below the trendline, it can result in a further fall. So, we suggest you hold the longs on the back of the trendline support but with a stop-loss which can be kept at ₹240. But note that this can take mark-to-market (MTM) loss over 4 per cent that you mentioned. If the stock rallies from here, consider exiting at ₹278.
Bharti Airtel (₹725): Since November last year, the stock of Bharti Airtel is charting a sideways trend between ₹640 and ₹770. It is currently hovering near the middle of the range. But as the scrip has been rallying since mid-July this year, we can expect the price to rise from here, probably to ₹770. So, you can hold the futures long. But place a stop-loss at ₹695. Exit the longs if the price touches ₹770.
Follow the above irrespective of any data release and you can hold until either the target or the stop-loss level is triggered. Send your queries to derivatives@thehindu.co.in