PFC - govt owned Power finance company is a sell on rise recommendation for next week.
1) Open Interest in the stock has risen by 9% on Friday. The share fell down by 2.5%. Both the indicators together indicate bearishness in the stock.
2) Call Writing in 210 Feb calls were seen which is a negative sign.
3) Technically though, the stock look oversold in the short term (see chart 1 below)
Chart 1
4) On long term chart (Chart-2), the stock has fallen from its long term resistance levels of 220-225 Rs. It has now reached its support trend line from where it may rebound a bit. It has to break 215 Rs levels on closing basis to confirm rebound which can enable it break 222 Rs resistance.
Chart 2
5) The combination of Open Interest Data and Technical Charts make it an attractive trading opportunity to sell on rise.
6) One may sell the stock around 208-210 Rs if it tries to take support around those levels with stop-loss of 217 and short term target of 196 and 190. (Risk-Reward Ratio at 1:2 and 1:3)
7) Those who can wish to take long term view risk can sell around 210-212 with stop-loss of 225 on closing basis with target levels of 190 and 175. (Risk-Reward Ratio at 1:1.83 and 1:2.83)
Best of Luck :)
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