The long-term outlook remains negative for Bajaj Finance, as long as it remains below ₹2,932. The stock finds an immediate resistance at ₹2,550 and the next one at ₹ 2,746. On the other hand, Bajaj Finance faces an immediate support at ₹ 2,313 and the next one at ₹ 2,172. A close below ₹2,002 will trigger a fresh downfall on the stock. However, we expect Bajaj Finance to move in a narrow range between ₹2,150 and ₹2,750.

F&O Pointers: The counter is having a stupendous rally this series, from a low of ₹1,985.35 to a high of ₹2,543 on June June 8. Since then, Bajaj Finance June futures has been moving in a range with an upward bias. Bajaj Finance futures at ₹2,454.35, now commands a premium as against spot close of ₹2,450.15. Option trading indicates a wide range of ₹2,000-2,600.

Strategy: This strategy for traders who can withstand wild swings and have enough money to pay margin calls. We advice traders to consider short strangle on Bajaj Finance by using 1800-put and 3000-call. These options closed with a premium of ₹8.45 and ₹15.40 respectively. As the market lot is 500 shares per contract, this strategy will ensure an inflow of ₹11,925. This would be the maximum profit one can earn from short strangle. For that to happen, Bajaj Finance has to close between ₹3,200 and ₹1,800 at the time of expiry.

However, the loss is unlimited if Bajaj Finance swings in either of the direction - i.e. either up or down. A close above ₹3,223.85 or below ₹1,776.15. We advice traders to consider holding it till expiry or if the loss mounts to ₹8,500. Traders should bear it in mind that Bajaj Finance is a high volatile stock.

Follow-up: SAIL moved up sharply on Monday itself, giving only a little time to react for traders. Stop-loss would have triggered on SAIL strategy for those who had bought on subsequent days.

(Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.)

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