Positional LongTerm Investment - BharatForgAfter 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.
