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Punj Lloyd (Rs 100): The stock is in a long-term down-trend but it has psychological support around Rs 100. A short-term pull back rally is possible from these levels. The stock finds immediate support at Rs 95 and resistance at Rs 106. The next key resistances are Rs 117 and Rs 125. A dip below Rs 95 has the potential to weaken the stock towards Rs 75.
F&O pointers: The Punj Lloyd January and February futures closed at a marginal premium to the spot. Rollover to February series has been quiet decent at 30 per cent. Options trading also suggest a positive bias.
Strategy: Consider going long on Punj Lloyd February futures with tight stop-loss at Rs 95 (closing day basis, spot price) for an initial target of Rs 105. Shift the stop-loss to Rs 105, if the stock moves past that level for a target of Rs 117. Trail the stop-loss so as to protect profits, as the counter is a high beta . Market lot is 2,000 units per contract.
Traders with penchant for risk can consider buying Punj Lloyd 100 call (January), which closed on Friday at Rs 1.70.
Financial Technologies (Rs 713): The stock was hammered sharply in the last few months and has breached all important support levels. The outlook still remains negative for the stock. Only a close above Rs 1,185 would negate the negative outlook. The immediate resistance and support appear at Rs 779 and Rs 662 respectively. A close below Rs 662 could weaken the stock to Rs 540.
F&O pointers: The Financial Technologies futures have added short positions and saw a rollover of 28 per cent. Options are not active.
Strategy: Consider going short on Financial Technologies February futures with a tight stop-loss at Rs 779 for an initial target of Rs 662 (spot price on a closing day basis).
Follow-up: Last week we had advised traders to consider short on Gail India and long on L&T. While the former moved on expected lines, the latter maintained the downtrend, belying our expectation of a short-term pullback. Traders could hold on to the L&T position with the recommended stop-loss level.
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