The stock of Apollo Hospitals Enterprise (₹4,865.5) is ruling at a crucial level. The immediate support is at ₹4,820, failing which it can fall to the major support at ₹4,595. A close below the latter will alter the bullish outlook on the stock. On the other hand, the immediate resistance levels are ₹5,021 and ₹5,346. We expect the stock to come under pressure in the short term.

F&O pointers: Apollo Hospitals August futures closed at ₹4,856.70 and September futures at ₹4,947.25 against the spot price of ₹4,865.50. Rollover to next month’s series stands at around 8 per cent. The premium of September futures signals rollover of long positions and discount of current month futures indicates existence of short positions. Option trading indicates that the stock can move in the ₹5,200-4,500 range.

Strategy: Consider calendar bear-put strategy. Initiate by selling 4900-strike of August put and simultaneously buying the same strike of September contracts. These options closed with a premium of ₹69.55 and ₹155.70 respectively. This means this strategy will cost ₹86.15/contract or ₹10,768.75, which will be the maximum loss. This will occur if Apollo Hospitals stays above ₹4,900 for the next 30 days.

However, profit potentials are huge if the stock rises or holds at current level till expiry of August contracts and falls sharply after that. Hold the position for two weeks.

Follow-up: Hold Wipro long call positions of September; short call options of August can be retired. Traders can also exit from the Federal Bank short strangle strategy recommended previous week, which should have yielded positive results.

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