1) Ashok Leyland on Monday, has shown weakness accompanied by heavy trading & delivery volumes and addition of Open Interest, which further indicates weakness in the stock.
2) The share accumulated 47 Lakhs shares of Open Interest. Out of the same, 41 Lakhs shares have been added in Feb contract and 1.8 Lakhs in 15 Put.
3) Trading Volumes and Delivery Volumes have doubled and trebled respectively from its 1 Month average which indicates institutional based selling. The share was closed 2.5% yesterday.
4) On the technical charts, we have seen institutional selling coming yesterday around 15.9-16 Rs level after which stock tried taking support around 15.7 Rs levels. We feel that these are the levels to get short.
5) If we look at the daily charts, the last support now stands at Rs. 15.3-Rs. 15.1. If that is broken, then no major support seen before 13.5 Rs which makes the stock more attractive to go short.
6) So, our recommendation is to Sell Ashok Leyland and keep stop-loss at 16.25 Rs. for intraday and 16.45 Rs for positional trades. The positions can either be covered at 15.1 Rs or if that too is broken, then one may wait for the levels of Rs. 13.5 to cover the shorts.
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