I\u2019ve a long position on Tata Steel futures bought for \u20b9216. What is the outlook for the stock? Should I exit or hold?<\/p>\n
Tata Steel (\u20b9183):\u00a0The stock has been on a decline for the last two weeks. It fell off the resistance at \u20b9193. But on Friday, after making a low of \u20b9180, it recovered well.<\/p>\n
Note that there is a support between \u20b9180 and \u20b9182, on the back of which, the stock can rebound. So long as this support band holds, bulls will have a chance to regain ground. That said, a breakout of \u20b9193 will make the set up more favourable for the bulls.<\/p>\n
With respect to futures, the August contract, too, now trading around \u20b9184, has a support band between \u20b9180 and \u20b9182. But it ought to surpass the hurdle at \u20b9195 in order to establish a sustainable rally. A breakout of \u20b9195 can trigger a rally to \u20b9210.\u00a0<\/p>\n
Given the above factors, you can hold the trade but place a stop-loss at \u20b9178. Because, a breach of the support at \u20b9180 can lead to a deeper fall, potentially increasing the loss. That said, once the contract rises to \u20b9193, we suggest exiting, though at a loss. You can go long again once the futures decisively breaks out of \u20b9195.<\/p>\n
Shall I buy Godrej CP September futures at the\u00a0current\u00a0market price?<\/p>\n
Godrej CP (\u20b9940):\u00a0The stock has dropped over 10 per cent so far this week. Consequently, it breached the support at \u20b9980, potentially opening the door for further decline. However, from the current level, there is a chance for a temporary rise. The scrip can appreciate to retest at \u20b9980.<\/p>\n
Therefore, Godrej CP September futures (currently at \u20b9946) can also see an upswing to \u20b9990. So, you can consider going long. But initiate trade at \u20b9925 so that you can achieve a better risk-reward ratio. Place stop-loss at \u20b9905.<\/p>\n
When the contract moves up to \u20b9970, tighten the stop-loss to \u20b9945. Exit at \u20b9990. But note that this is a counter-trend trade and carries higher risk.<\/p>\n
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