Tata Steel can touch Rs 310 in near term: JK Jain

JK Jain of Karvy Stock Broking told CNBC-TV18, " Tata Steel  has significantly underperformed the market. Overall, if one looks at the stock, the stock has seen a significant movement in the last two sessions but it has failed to breach its resistance of Rs 325 to Rs 330 levels which was a four year breakdown that it has given in the last month and thereafter the stock has been under significant pressure.

He further added, "We are giving a Put ratio here wherein one can buy 320 Put and simultaneously sell two lots to 310 Put 320 put is trading close to around Rs 10 and 310 Put is trading around Rs 6. So, this strategy would give you a net credit of Rs 2. Even if the stock goes up the strategy would yield a return of Rs 2."

"We are expecting the stock to gradually go down and remain close to around 310-300 levels. This strategy is break-even will be around 298, below that the strategy could start yielding loss. We expect the stock to see selling pressure on rallies rather than significant downside. We expect the stock to run down to around 310 over the period of expiry. We are advising a put ratio wherein one can buy 320 Put and simultaneously sell two lots of 310 Put. The strategy would yield a maximum profit of Rs 12 if the stock expires around 310 levels," he added.

Disclosure: The strategy that I have discussed would have been given to the client but personally I don't hold any of them.

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