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Even as the long-term outlook for TVS Motor Company (₹565) appears bright, the stock may find it difficult to sustain the momentum in the short term. TVS Motor finds an immediate support at ₹552 and a crucial one at ₹536.
A close below the latter will alter the bullish outlook. On the other hand, TVS Motor faces an immediate resistance at ₹606 and a major one at ₹677. It appears that the stock can climb to fresh highs if it manages to close above ₹677 with good volumes. However, we expect the stock to face correction in the immediate term.
F&O pointers: The TVS Motor futures witnessed a roll-over of open positions to August contracts at about 8 per cent. Both the current and the next month (August) series futures trade at a discount, signalling the existence of short positions. Options on TVS Motor are not active.
Strategy: We advice traders to go short on TVS Motor August futures with stop-loss at ₹568. If the stock opens on a positive note (above the stop-loss mentioned), traders can place stop-loss at ₹587.
Traders can book profit at ₹552 initially, while those with deep pockets and capable of withstanding volatility can aim for a target of ₹536.
Traders should be aware of the margin commitments before entering the position. Also note that TVS Motor is not part of the list of stocks where delivery of shares is compulsory in the F&O segment.
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