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IFCI : The long-term as well as short-term outlook remains negative for IFCI as the stock breached its all-important support level.
The stock now finds resistance at Rs 24 and support at Rs 17.
If the bearish trend sustains, the possibility of the stock touching the support level is not ruled out.
In the short-term, the stock could see a narrow movement between Rs 20 and Rs 24.
F&O pointers : The counter accumulated fresh short positions. This is one of the counters that witnessed heavy rollovers, particularly on the short side.
The rollover was 91 per cent to the December series. Low cost of carry indicates trader unwillingness to carry over the position. At the same time, higher annualised volatility signals caution.
Strategy: Traders can consider bear put spread or short strangle. We recommend short strangle for IFCI. This can be initiated by selling 25 call and 20 put that closed at Rs 0.85 and Rs 0.65 respectively.
While the maximum profit in the strategy is the premium collected, the loss could be unlimited if IFCI swings wildly in single direction. Besides writing (selling) options involves high margin commitments. The maximum profit will occur if IFCI settles between Rs 25 and Rs 20 on the expiry day. The market lot is 4,000 shares. This strategy is for high-risk appetite traders only.
Shipping Corporation : The long-term as well as medium-term outlook remains negative for the stock, as it closed below an important support level.
Only a close above Rs 117 would change the outlook to positive for the stock.
Shipping Corporation now finds an immediate resistance at Rs 72 and support at Rs 49. It now appears the stock is heading towards its support level. It finds its next support at Rs 36.
F&O pointer s: The Shipping Corporation December futures did not see much accumulation.
Rollover of open position from November to December stood at 87.5 per cent, which is slightly lower than the three-month average. Rollovers with fall in share price indicate negative bias for the stock. Options are not active.
Strategy: Traders can consider going short on Shipping Corporation.
The stop-loss can be placed at Rs 62.5 for an initial target of Rs 49. Investors with long-term perspective can keep the stop-loss at Rs 72.
Follow-up: We had recommended a long on Siemens, but the recommendation turned negative, as the stock hit its stop loss.
However, recommendation of writing 2,200 call provided profit opportunities.
Feedback or queries (on positions) may be sent to f&o@thehindu.co.in,blfuturesoptions@gmail.com by Sunday noon. Replies will be published on Monday.
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