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I have sold futures of Motherson at ₹165.15. What is the outlook for the stock before June contracts expire?
Samvardhana Motherson International (₹193): The stock has been gaining steadily since mid-May. While the stock was largely moving sideways over the past few sessions, it saw a fresh breakout in the first half of today’s session. This has opened the door for another leg of rally potentially to ₹200.
There are no signs of a bearish reversal yet. The stock should breach the support at ₹175 for the trend to turn bearish. Given the current bullish moment, such a fall is not likely to happen, at least before the June expiry.
Therefore, we suggest exiting your futures short position now.
Always remember that when a stock is in a sharp uptrend, do not initiate sell positions unless there are clear indications of a reversal like a bearish chart pattern, which is confirmed, or a breach of a key support.
Send your queries to derivatives@thehindu.co.in
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