F&O stock strategy: How to trade in Chambal Fertilizers, SAIL and Tata Motors?

Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research at SBI Securities Currently sees 20,830-20,810 as an important support level for Nifty. On a breakdown and sustenance below 20,810, a further correction up to 20,750-20,730 will be on the cards, he adds. On the other hand, a surge above 21,020 can take the Nifty towards the 21,090-21,110 zone, he further said.

We spoke to analysts on how one should trade stocks that were in focus in the previous trading sessions based on derivative and technical data:

Analyst: Sanket Thakar, CMT, Founder, Alpha Bot Capital told ETMarkets


Chambal Fertilizers’ rally staring at a temporary halt
Chambal Fertilizer & Chemicals has given a huge upside spike of 7% on December 6, 2023, adding a significant amount of percentage change in the open interest seen on the option chain data. Technically the setup is coming near its important resistance zone along with the RSI being in the overbought space.

The Option chain data shows that the CALL writers have built up in the same resistance zone of Rs 350 and Rs 370 levels, where the 370 level is the exact matching level along with the trendline showing an increase of 1,191% in the Open Interest. This means that the traders are expecting a temporary bull run halt at this level. This serves as a good opportunity for CE writers and PE buyers at the current stage for a couple of days.

SAIL to remain sideways or on downside in the near term.
SAIL has seen the highest increase in open interest of call option & also the price increase on December 6 2023. But the situation here is again that it has hit its trendline resistance along with an overbought condition in RSI.

Looking at the option chain data there has been a strong build-up of CALL writers in CE option strike price of 100 and 105, where the 105 strike price has seen an increase of 106%. Technical and Option chain data both combined show us that SAIL could remain sideways or a little bit on downside for a couple of days from this level and short-term PE options buyers can take advantage of the situation to mint some money on the downside fall in the short term.

TATA Motors offers an advantage to CE options buyers in the near future.
TATA Motors has been into a long bull run and it has consistently witnessed growth in its price along with the long build-up in the open interest data. It has also technically broken out of its flag pattern in intraday charts.

The option chain data suggests 3 important strike prices with high open interest data in CALL Options 720 - 730 & 750. TATA MOTORS being already in uptrend has high possibilities of touching its levels one by one as it crosses past them. This will add an advantage to CE options buyers in the near future.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)