I’ve a Unitech 120 call at Rs 3.25 last Friday. Please suggest if I should trigger stop-loss now or buy at the current level to average – Mr K.L.N.Murthy, Bangalore

Your 120 call is now quoting at Rs 1.7. You can consider the following strategies.

a) The underlying is in a medium-term downtrend and is unlikely to reach Rs 120 in near term. So you can book your loss and exit from the counter straight away.

b) The other strategy is to sell Rs 110 call, which is quoting at a premium of Rs 4.40. This will turn your position in-the-money. If Unitech falls further, the short position would curtail the loss. A maximum loss of Rs 10 per contract would occur if Unitech moves above 120. We expect the stock to move in Rs 95-115 range and it might touch the lower band of Rs 95.

Please advice if I can buy Punj Lloyd and Bharti Airtel (October series) at current levels. – Ms Vidya Anandakrishnan, Palakkad

Bharti Airtel (Rs 437)

You can stay away from Bharti Airtel. The counter is currently witnessing a range-bound movement with plenty of whipsaws that are difficult to trade. Wait for the stock to move out of its current range between Rs 395 and Rs 440 before taking any position in this counter.

Punj Lloyd (Rs 261)

You can stay away from this counter also as it is currently grappling with the key resistance in the Rs 260 zone. A break-out beyond this zone can make the stock rally to Rs 290 or Rs 355 while a reversal from here can cause a decline to Rs 185 or Rs 205. As sharp moves are possible in either direction, it is wise not to venture into Punj Lloyd futures.

I have a futures position in Bharat Forge. Can I hold this position for some more time or is the stock expected to come down? - Pratiksha Thakore

You have not specified the rate at which you have purchased the Bharat Forge futures. That makes it difficult for us to advise you on your position. If we consider the clues provided by the F&O market in this stock, the accumulations of open interest were quite low. Client-wide positions stood at just 5 per cent as against overall market wide position. Option trading on this stock is also not active.

As long as the stock (underlying equity) stays above Rs 270 there is no problem for the counter. In that event, the chance of it heading towards Rs 300 is bright. On the other hand, if it fails to sustain 270, the stock could test 230 and then to 190-200 level. The annualised volatility at 77.54 suggests it could swing sharply. You can hold on this futures with a stop loss at 270 (spot price).

s:BL