Stock Strategy: Short Ambuja Cements, CNX-IT :: Business Line

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Ambuja Cements: The immediate outlook for Ambuja Cements has turned negative. While key resistance appears at Rs 141, the stock finds an immediate support at Rs 117.

A close below the support could weaken the stock to Rs 98. Only a close above Rs 1,525 would change the outlook to positive for the stock.

F&O pointers: Despite small gains on Friday, the Ambuja Cements June futures witnessed unwinding of long positions.

It also closed at a marginal discount with respect to the spot price. Even the July futures are trading at a discount, signalling short rollovers.

Options on Ambuja Cements are not active enough to discern any view.

Strategy: Traders can consider shorting Ambuja Cements with a stop-loss at Rs 141 for an initial target of Rs 117.

If the stock opens on a weak note, shift the stop-loss to Rs 125.

Traders with penchant for high risk could also consider rolling over Ambuja Cements short to the next month series for a target of Rs 98.

Market lot for Ambuja Cements is 2,000 shares.

CNX-IT: The overall outlook remains negative for CNX-IT index. The index finds an immediate resistance at 6,525.

However, as long as it stays below 6,995, the outlook would remain negative. CNX-IT now finds an immediate support at 6,175, a close below which could drag the index sharply towards 5,525, though in between 5,850 could act as a minor support zone.

F&O pointers: CNX IT June futures witnessed unwinding of long position, while July future witnessed a fresh accumulation of short positions.

Options are not active in CNX-IT index futures.

Strategy: Traders can consider going short on CNX-IT index with a stop-loss at 6,525 for an initial target of 6,175. Market lot for CNX-IT is 50.

Follow-up: We had advised traders to go short on Jet Airways with a stop-loss at Rs 487 for an initial target of Rs 417.

Though the stock did witness negative bias, it did not move on expected lines. Traders can consider holding their short positions till it achieves our recommended target.

We had also advised traders to short ITC or buy 190 ITC put or short straddle using 190 strike.

The stock, however, is hovering around its last week levels only.

Those who shorted ITC futures can continue holding the position, with the recommended stop-loss.

Option strategy on ITC can be held till expiry of current month series.