The short-term outlook turned positive for the stock of L&T Finance Holdings (L&TFH) (₹102.50), as it managed to break out of the range of ₹60-95 two weeks ago. The stock finds an immediate support at ₹96 and a major one at ₹79. A close below the latter will change the outlook negative for the stock.

On the other hand, L&TFH finds resistance at ₹110; a conclusive close above this will take the stock towards ₹122. Only a close above ₹145 will change the long-term outlook positive. We expect the stock to sustain its short-term positive trend.

F&O pointers: The counter witnessed a healthy rollover of nearly 94 per cent to June month series, despite it being under trade ban during the last few days. L&TFH June futures, at ₹103.40 against the spot price of ₹102.50, indicates long rollover. Option trading shows that ₹100 is a crucial level.

Strategy: Consider a bull-call spread on L&TFH by selling 106-strike call option and simultaneously buying 102-strike call option. As these options closed with a premium of ₹3 and ₹4.90 respectively, the net cost of this trade will be ₹1.90/lot.

The maximum loss is the net premium paid — ₹16,955.60 (market lot 8,924), which will happen if the stock closes below ₹102 on expiry. The maximum profit would be ₹2.1/lot — ₹18,740.30, which will occur if the stock closes at or above ₹106 on expiry.

We advise traders to hold the position for at least two weeks.

Follow-up: Tata Chemicals option moved on expected line. Traders who failed to book profits on 1000-call can hold the position with a trailing stop-loss at ₹18 once the premium value crosses above ₹22.

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