I’m holding 400-call on Birlasoft bought for an average price of ₹12.40. I’m targeting a price of ₹19. What is the outlook and how long should I hold this? – Anish
Birlasoft (₹366.50): The stock has been in a steady downtrend since early 2024. The latest leg of downtrend began in December last year after the stock faced resistance at ₹620. The stock slipped below a support at ₹385 last week, a bearish sign.
Nevertheless, there is a chance for a corrective rally from the current level. Such an upswing can lift the stock to ₹385-400 price region. That said, since the broader trend has been weak, the bears are at advantage.
Since you have mentioned an average buying price of ₹12.40, we assume that you hold more than one lot of 400-call. If you have bought in bigger quantity, we suggest exiting the position right away as the trend is bearish and even if there is a recovery, we cannot be sure about the magnitude of the same.
If the number of lots is within your level of risk tolerance, you can hold for two more weeks. In case the stock recovers to ₹385-400 region, the premium of 400-call (currently at ₹3.10) can rise to somewhere between ₹8 and ₹12. Exit the trade when this occurs. But note that your position turning profitable is less likely.
I’ve a long position on Coforge futures (April contract) bought for ₹7,746.90. Shall I exit or average at current price? – Palani Shanmugam
Coforge (₹6,607.90): The stock has been depreciating since early 2025. Last week, it broke below a crucial support at ₹7,150. While this is a bearish signal, there is a support ahead at ₹6,380.
So, we expect the stock to move up either from the current level or after a decline to ₹6,380. That said, such a rally can be arrested between ₹7,150 and ₹7,300. Only a breakout of the latter will change the trend positive.
So, Coforge April futures (₹6,640.65) might rally to ₹7,200 or ₹7,300. But this might happen after a dip to ₹6,400. So, if you can withstand the risk of a fall to ₹6,400, hold the long with a stop-loss at ₹6,380. Exit at ₹7,200. Or if you feel the risk is higher, liquidate the trade now.
About adding further position, if the level of unrealised loss that you might witness when the contract falls to ₹6,400 is within your risk tolerance, you can average. Exit all longs at ₹7,200. But we do not recommend buying more especially when the broader trend is negative.
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Published on April 5, 2025
