Technical Analysis

Sun TV Network: Buy ₹940-put

KS Badri Narayanan | Updated on February 16, 2018 Published on February 11, 2018

 

The long-term outlook for the stock of Sun TV Network (₹973.5) is positive. Only a close below ₹783 will alter the bullish view on Sun TV for the long term. The stock finds immediate support at ₹923 and resistance at ₹1,022. However, we expect the stock to remain under pressure in the short term.

 

 

F&O pointer: Sun TV February futures fell sharply along with fall in share price. This indicates that traders are booking profits instead of carrying forward their positions. Option trading indicates that Sun TV faces resistance at ₹1,000 and support at ₹880.

Strategy: Traders can buy ₹940-put option of Sun TV, which closed with a premium of ₹20.95. As the market lot is 1,000 shares per contract, one has to fork out ₹20,950, which would be the maximum loss one can suffer. The position will turn negative if Sun TV moves upwards. Profit potentials are huge in this strategy, if the stock witnesses sudden fall.

Traders should remember that the stock may remain resilient as the retail holding is very low. So who are short in the market may have to struggle for delivery of shares. We advice traders to exit the position either if the profit rises to ₹15,000 or loss hits ₹8,000. Hold the position for at least a week.

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