HPCL - This counter is a wait and watch specimen. The chart is telling a story that is likely to unfold in the near future. Should the scrip close below the 310 levels for 1 - 2 sessions, expect a sharp fall to the 280 levels in a hurry. There is a possibility of a head and shoulder formation as depicted on the chart below. However, a confirmation of the same is needed ( by a fall below 310 levels ). The stock is also testing it's 200 day SMA which will be violated upon a fall below the H&S neckline. Patient traders should wait for a close below 310 and short the counter.

Your call of action - 

• Investors / cash segment players - Delivery based selling is recommended below the 310 levels and a stop-loss be maintained at the 325 levels.

• Aggressive F&O traders - Futures traders should short the November futures below a price of Rs 309 and maintain a stop loss at the 320 levels. Expect to book profits at the 290 levels in the short term. Options traders may buy the November 290 puts at a premium of Rs 3.

• Fixed income strategy - Sell the November 380 calls at a premium of Rs 5 and above.

• Derivatives contract size - Market lot = 1,3 00 shares. Futures margin = approx 1,05,000 Rs  ( Margins are subject to change daily )