The outlook for the stock of SAIL (₹168.55) remains positive. It finds support at ₹145 and ₹130. A close below later will change the short-term outlook negative.
On the other hand, the immediate resistance is at ₹184 and the major one at ₹221. A conclusive close above the latter will change the long-term outlook positive.
F&O pointers: SAIL was in a trading ban during most part of April and recently got out of the ban. The counter saw a healthy rollover of around 95 per cent. SAIL May futures, at ₹170.20 against the spot price of ₹168.55, signals a healthy rollover of long positions. Option trading indicates a range between ₹150 and ₹180.
Strategy: As options premiums are high, we suggest a rather risky strategy of going long on SAIL May futures at the current level. Traders should keep it in mind that this strategy is for those who can understand the risk and have enough cushion to meet margin commitments.
While initial stop-loss can be placed at ₹162, this can be shifted to ₹172, if SAIL futures open on a positive note and climb above ₹174.50. After that, stop-loss can be trailed based on the price movement of the underlying stock.
Though the initial target can be ₹184, we advise traders to book profits, however small it may be, based on their risk-taking ability, as this stock is volatile in nature and chance of entering the trading ban is reasonable.
Follow-up: Hold the long (700-call) Manappuram Finance strategy recommended last week.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading