Trading desk

NIFTY
Current: 5,998,
Target: 5,850
The Nifty saw unusual volatility swinging between 5,906 and 6,076 yesterday. This established lower lows and suggests a continued correction. Targets could be in the range of 5,850 by settlement (Nov 25). Possible actions. Sell Nov 6,000c (83) and buy Nov 6,100c (37) for net premium inflow of 46. This position has a maximum loss of 54. Also consider a bearspread of long December 5,900p (91) and short December 5,800p (60). The December position costs 31 and pays a maximum 69.

TATA STEEL
Current Price: Rs 623,
Target Price: Rs 600
The stock bounced off a double bottom at the Rs 595 mark and it has resistance between Rs 625 and Rs 630. It is likely to range trade today between Rs 600 and Rs 635. Keep a stop at Rs 630 and short. Increase the position between Rs 616 and Rs 620. Start booking profits below Rs 602.

HERO HONDA
Current Price: Rs 1,913,
Target Price: Rs 1,950
The stock has made a breakout above resistance at Rs 1,905-1,910 on extreme volume expansion. It could have a target of around Rs 1,950. Keep a stop at Rs 1,900 and go long. Increase the position between Rs 1,925 and Rs 1,930 and reset the stop to Rs 1,920. Start booking profits above Rs 1,950.

(The target price and projected movements given above are in terms of the next one trading session, unless otherwise stated)