The stock of HCL Technologies (₹838) is ruling at a crucial level. It finds a major support at ₹756 and resistance at ₹870. The stock will take a clear direction only after it breaks from the above mentioned band. HCL Technologies finds immediate support at ₹810. If HCL Technologies manages to top ₹870 level with good volumes, the stock can reach ₹990. On the other hand, if it fails to hold on to the support level, the stock could test ₹669. The stock may turn volatile after the company release its October-December quarter results on Tuesday.
F&O pointers: The counter witnessed a rollover of 29 per cent to February series. However, HCL Tech February contracts closed at ₹837.75, lower than the January price of ₹840.4. This signals rollover of short positions and due to dividend payout, as the stock will turn ex-dividend on February 1. Option trading indicates a strong support at ₹780.
Strategy: Traders can consider going short on HCL Technologies February futures with a stop-loss being placed at ₹857. If HCL Tech opens on negative note, shift the stop-loss to ₹840 and subsequently to ₹831 for an initial target of ₹784. However, if the stock raises and hits the stop-loss, traders should exit immediately. As options are not active in February contracts, there is no alternative strategy for traders.
Follow-up: Last week, we had recommended a long on Tata Chemicals. Despite a sharp fall on Friday, we advice traders to stick to the strategy.