The short-term outlook for the stock of DLF (₹360.25) changed positively for DLF. The stock finds an immediate support at ₹344 and resistance at ₹378. A close below ₹344 will take the stock to ₹312, which is a major support for DLF. A breach of this will turn the short-term outlook negative. On the other hand, if DLF finds major resistance at ₹400 and a close above this will also change the long-term outlook positive. DLF is likely to move in a narrow range with a positive bias.

F&O pointers: The DLF March futures closed at ₹362.70 — with a premium against the spot price of ₹360.25. The open interests declined from 4.52 crore shares to a current level of 4.43 crore shares. It appears that the counter saw unwinding of short positions. Option trading indicates that the stock could move in the ₹320-400 range.

Strategy: Consider buying 365-call whose premium closed at ₹8.30 on Friday. As the lot size is 1,650 shares, this would cost traders ₹13,695. While this is the maximum loss, profit potentials are high should the stock rally swiftly within a few days in the current series. Maximum loss will occur if DLF fails to get past ₹365 before expiry.

We advise traders to enter between ₹10 and ₹15 for an initial target of ₹25. Traders should carefully watch the movement of the option premium and keep the stop-loss suitably.

Follow-up: Book profits in Tech Mahindra 1120-put option.

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