Technical Analysis

Stock Strategy: Negative bias seen in Delta Corp

K. S. Badri Narayanan | Updated on September 24, 2011 Published on September 24, 2011






Delta Corp (Rs 103.1): The outlook for Delta Corp remains negative. After making a smart recovery from August low , the stock faced stiff resistance at Rs 115.



Only a close above this level would change the outlook to positive for the stock. In that event, it could chart a new high.



According to Fibonacci projections, Delta Corp could touch 165-175, if it is able to break through Rs 115 emphatically.



The stock is now heading towards its support level, which is placed at Rs 95. A conclusive close below this level has the potential to shave off about another Rs 30 for the stock, as the stock finds next support at Rs 67.



F&O pointers: The Delta Corp futures witnessed a rollover of about 13 per cent in open interests to the October series.



Options are not that active. However, a little cue available from that indicates a negative bias, as puts witnessed fall in open interest. Also calls added open interest.



Strategy: Traders could consider going short on Delta Corp with a stop-loss at Rs 115 for an initial target of Rs 95.



Traders with a penchant for risk could even consider holding for long period with a target of Rs 67.



In that event, they could shift the stop-loss to Rs 95, once it dips below that level conclusively. Market lot of the counter is 2,000.



S. Kumars Nationwide (Rs 44.8): The long as well as short-term outlook turned negative for S. Kumars Nationwide.



The stock finds an immediate support at Rs 39 and the next one at Rs 27. If the bearish trend sustains, the stock could even decline to Rs 18-19 level.



The immediate resistance appears at Rs 50.5 and the crucial one at Rs 75. Only a close above Rs 75 would change the outlook to positive for S. Kumars Nationwide.



F&O pointers: While the September futures closed at Rs 44.85, the October futures at Rs 45.



The S. Kumars Nationwide futures witnessed rollover of short positions to October series.



The rollover stood at just 14 per cent. This indicates traders were having negative view on the stock. Option trading did not see much activity.



Strategy: Consider going short on S. Kumars Nationwide October futures with a tight stop-loss at Rs 51 (spot price on a closing day basis) for an initial target of Rs 27.



Shift the stop-loss to Rs 39 should the spot price of S. Kumars Nationwide dip below that level. Market lot of the counter is 4,000.



Follow-up: Last week, we had advised a short on IFCI futures.



The stock has moved on expected lines.



As mentioned, traders could shift the stop-loss to Rs 33 and hold it for the recommended target.



We had also recommended a short strangle using 32.5 put and 37.5 call. The position is in-the-money.



On the other hand, India Cements moved positively last week.



We still believe the outlook is negative for the counter.



Traders with high risk taking capability can consider holding on to it with a stop-loss of Rs 77 (spot price on a closing day basis).



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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