The stock of Apollo Hospitals Enterprise (₹4,297.15) rules a crucial level. The stock finds an immediate support at ₹4,230 and the major one at ₹3,990. On the other hand, resistances are placed at ₹4,427 and ₹4,609. We expect the stock to sustain its momentum. The company will announce its second quarter results on November 10. Till then the stock may move in a narrow range with upward bias.

F&O pointers: The Apollo Hospitals October futures saw a sharp surge in open interests over the past couple of weeks. It shed open positions on Friday, albeit marginally. The contract, however, is ruling at a discount at ₹4,294.90 against the spot price of ₹4,297.15, signalling the existence of short positions. But November contracts at ₹4,308.20 indicate long rollovers. Option trading indicates that the stock could move in ₹4,000-4,500 range.

Strategy: We advise traders to consider a calendar bull-call spread on Apollo Hospitals, which can be initiated by selling 4,500-October expiry call option and simultaneously buying 4,500-November call option. As these options closed with a premium of ₹38.55 and ₹136.50, this strategy will incur net cost of ₹97.95 a lot or ₹12,243.75 (lot size is 125 shares).

We advise the traders to hold the position till November 10 (long position), while exit the October expiry short call position on the expiry date.

Traders could consider entering the position if the combined premium stands in the ₹90-110 range and look for an exit in the ₹185-200 range. Stop-loss can be placed at ₹125 initially once the combined value increases to ₹135 and can be shifted further suitably.

Follow-up: Last week we had advised a short-strangle on BoB. The position is in-the-money currently. Traders can consider holding it for one more week and exit with profits as suggested last week.

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

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