The short-term outlook turned positive for the stock of L&T Finance Holdings (L&TFH). At ₹86.8 now, it has resistances at ₹98 and at ₹122. A close above the latter will change the medium-term outlook also positive. On the other hand, there are supports at ₹78 and ₹67 (a major support level). Until the stock manages to hold above the latter, it has the potential to reach triple digits.

F&O Pointers: The L&TFH December futures at ₹87.75 against the spot price of ₹86.90, signals a healthy premium. The counter witnessed a steady accumulation of open interests, particularly during this week. Open interests jumped to about 5.16 crore shares from 43.7 lakh shares on November 15. Option trading indicates that the stock could move in ₹80 and ₹90.

Strategy: We advise traders to consider a bull-call spread on L&TFH by selling 90-call (₹2.80) and simultaneously buying the 85-call (₹5.10). As the market lot is 8,924 shares per lot, this strategy will cost traders ₹2.30 (lot) or ₹20,525.20, which will be the maximum loss. This will happen if L&TFH closes at or below ₹85.

A maximum profit of ₹24,094.80 is possible, if L&TFH rises to ₹90. We advise traders to enter at a premium ₹2-2.75 and exit at ₹5.

Alternatively, traders can consider long on L&TFH futures with an initial stop-loss at ₹78, which can be raised to ₹85 once the contract crosses ₹90. Target can be ₹98.

If the stock opens above ₹90, traders can stay away from these strategies.

Follow-up: Calendar bull-call spread on Infosys worked on expected lines. While risk-averse traders can book profits, others can aim for a target of ₹96 on 1600-call with a stop-loss at ₹45.

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

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