F&O Strategy: Time to Take a Long Ride on TVS Motor Futures

Shares of TVS Motor Company (₹723.7) reign supreme. A successful close above ₹724 will stop the current bearish outlook, while a close above ₹741 will change the outlook to positive. The stock finds resistance at ₹757 and closing above ₹776 will trigger a new rally on TVS Motor which can take the stock to new highs.

In contrast, the stock finds immediate support at ₹688 and the major at ₹649. A close below the latter level will trigger a further decline in the stock which may drag it towards ₹598. We expect the stock to maintain the uptrend, going forward.

F&O pointers: TVS Motor June futures closed at ₹724.45 – with a premium to the spot close of ₹723.70. TVS Motor has witnessed a steady accumulation of open positions as well as an increase in the price of the underlying stock. Over the past few days, open positions increased from 2.04 lakh shares to 80.76 lakh shares as the share price fell from ₹678 to ₹727. Options trading indicates that the stock may move between ₹650 and ₹800.

Strategy: We advise traders to consider going long on TVS Motor Futures while maintaining the stop-loss at ₹710 for an initial target of ₹741. The stop-loss can be moved to ₹723, if the contract exceeds ₹730.

Deep-pocketed traders can patiently aim for higher target levels. That is, they can hold the stop-loss at ₹688 and aim for an initial target of ₹810. The stop-loss can be moved to ₹757, once TVS Motor breaks above ₹762.

Follow: The Adani port strategy would have triggered stop-losses.

Note: Recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.

Published on

May 28, 2022

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