Go long on Titan futures

 

The outlook for the stock of Titan Company (₹940) remains positive. The outlook will be positive as long as Titan remains above ₹868. If the stock fails to sustain above that level, the medium-term outlook will turn negative.

 

Titan finds an immediate support at ₹904 and the immediate resistance is at ₹985. If the current bullish trend sustains, Titan has to potential to climb new peaks. We expect the stock to pierce the four-digit and reach ₹1,040 or even to ₹1,128.

F&O pointers: Titan Company May futures shed 3.10 lakh shares or 2.44 per cent in open interest on Friday alone. Since May 10, open interest positions slumped from 1.37 crore shares to 1.24 crore shares now.

However, the decline in open interest is not a secular one, and there was marginal improvement on some days. Option trading indicates that the stock could move in ₹900-1,000 range.

Strategy: We advice traders to go long on Titan Company futures with a stop-loss at ₹904. If Titan Company opens on a strong note, then shift the stop-loss to ₹940 and hold for an initial target of ₹1,040. Roll over the positions for few series to achieve the target.

This strategy is risky, as wild swings could erode investments very quickly. So only traders who can withstand margin calls commitments can consider this strategy.

Alternatively, risk-averse traders can consider buying ₹960-call, which closed at ₹11.40.

As the market lot is 750 shares, it would cost the trader ₹8,550, which would be the maximum loss on can suffer if Titan fails to move past ₹971.40. We advice the traders to exit if the loss mounts to ₹4,000 or at a profit of ₹8,000.

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