The long-term outlook for the stock of Titan Company remains positive, as long as it stays above ₹1,318. Titan sees an immediate support at ₹1,504 and the next one at ₹1,424. The major support appears at ₹1,393. If the current bullish trend persists and the stock conclusively closes above ₹1,578, it has the potential to touch ₹1,624.
However, we expect the stock to moderate a bit before pursuing upward journey.
F&O pointers: Titan Company April futures has seen steady accumulation of open interests along with price rise.
Besides, the April contract at ₹1,570.10 maintains a healthy premium of ₹10 over the spot price of ₹1,559.35, signalling existence of long positions. Option trading in the stock indicates a range of ₹1,400 to ₹1,600.
Strategy: We advise traders to consider a put-spread strategy on Titan Company, as we expect a correction for the stock. This can be constructed by buying ₹1,560-strike put and simultaneously selling ₹1,540-strike put. These options closed with a premium of ₹39.65 and ₹31.05 respectively.
As the market lot is 750 shares a contract, this strategy will result in a net outflow of ₹8.60/contract or ₹6,450. The maximum loss one can suffer from this strategy is the net premium paid (₹6,450) and that will happen if Titan Company stays above ₹1,560.
On the other hand, a profit of ₹8,550 is possible if the stock closes at or below ₹1,540.
We advise traders to exit the position if the loss mounts to ₹4,500. Traders with higher risk-taking ability can hold on to the position till expiry.
![0304Titancolcol 0304Titancolcol](/theme/images/bl-online/1x1_spacer.png)
Follow-up: Last week, we advised selling HCL Tech ₹1,060-call.
Though the stock remained resilient, we advise traders to hold on to the position.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.