Positional LongTerm Investment - BharatForg

After a constant decline from 800 odd levels stock is consolidating beween 500-470. Stock noticing good support at 470 levels and noticing a bullish crossover on weekly charts. Bullish doji at the end of a downtrend shows signs of an early reversal. Downside of the stock is limited and has huge upside potential. Above 494 where its facing huge resistance, stock may see 515/530/540/590 levels in medium to long term. However since market is bearish further decline can't be ruled out, if it participates in correction. For safer side keep writing the nearest ATM subsequent expiry CE and employ an covered call strategy.

6 Month investment period may generate 30% ROI from hedging (written calls) and you may earn 10-20% ROI from the stock movement. In case of decline roll down the written CE when premium falls below the nearest ATM CE. This will help you hold the stock for long term while earning monthly 3-5% ROI from hedging. Money earned from hedging may be used for reinvestment especially when stock declines.

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Disclaimer: Objective of this post is to educate and help all members earn profit from trading. I am not a SEBI registered analyst and strongly recommend people not to trade in NSE/BSE/MCX market basis above recommendations. All the stock picks are momentum picks chosen using technical indicators and for education purpose only. I am not responsible for profit and losses or SEBI audits arising out of the above calls. Stock market trading and investment is subject to market risks. Contact your financial advisor before taking trades or trade at your own risk.

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Those who are long in this can gain additional 4-5% ROI every month by writing the ATM or near ITM call. Nearest ATM strike CE you will get 18-22 ruppees. Means in 12 months you will at least get back 240 points from covered call strategy irrespective of stock movement. So dont rely on returns from stock. Use your holdings as collateral and keep getting monthly rental income. Instead of waiting for 20 years for some returns. A seasoned option trader can make even more money by utilizing the swing of the stock.

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Stock made high of 513.4