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The short-term outlook for the stock of Asian Paints (₹3,040.60) remains neutral to negative. Support levels are at ₹2,975 and ₹2,814. A close below the latter will change the medium-term outlook negative. Immediate resistance is at ₹3,295. A close above this will change the long-term positive.
F&O pointers: Asian Paints August futures closed at ₹3,054.65, a premium of over ₹14 against the spot close of ₹3,040.60. The futures witnessed a steady build-up in open interests – it rose to four lakh shares from just one lakh shares on July 15. This signals accumulation of longs. Option trading indicates that the stock could move between ₹2,900 and ₹3,200.
Strategy: Buy 3040-put on Asian Paints. The option closed with a premium of ₹51.25. As the market lot is 200 shares, this would cost ₹10,250, which would be the maximum loss. The position will turn positive if stock declines from current level while the break-even point is ₹2,988.75.
We advise traders to exit the position if the premium rises to ₹100. Traders can keep stop-loss at ₹20.
Follow-up: We recommended buying 490-strike put on ITC. However, the premium rose sharply on Monday itself, thus providing a little opportunity for traders. Those who entered at a higher price (above ₹10), stop-loss would have triggered. Those who bought at around ₹6-7 can continue to hold and review later if the profit is not met.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading
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