The stock of Gail India (₹132.45) is ruling at a crucial level. The stock finds an immediate support at ₹122 and resistance at ₹147. While the current trend is sideways, a close above ₹160 will change the outlook positive for Gail India and a dip below ₹102 will be bearish. We expect the stock to move in a range with an upward bias.

F&O pointers: Gail India futures witnessed a rollover of 13 per cent. While the Gail June futures closed at ₹132.85, the July futures closed at ₹132.70 against the spot close of ₹132.45. The discount of farther month contracts signals rollover of short positions. Option trading indicates that Gail India can move in ₹130-155 range.

Strategy: We advise a calendar bull-call spread strategy using 135-strike of current and July month contracts. These call options closed with a premium of ₹1.65 and ₹4.60 respectively. That means traders will have to incur an outflow of ₹2.95/contract or ₹17,995 (market lot 6,100 shares). The position will turn extremely profitable if Gail India rules at current level till expiry of current month (June 30) and charges up sharply in July.

A close above ₹137.95 will turn the position positive i.e., ₹137.95 is the breakeven price. Hold the position for at least three weeks while stop loss can be placed at ₹12,500 initially i.e., exit if the loss mounts to this amount.

The maximum loss of ₹17,995 is possible if the stock rules below ₹135 till the time of July expiry.

Follow-up: The stock of Infosys (₹1,441.10) moved on the expected lines and the position is marginally in-the-money. We advise traders to book profits if Infosys surges above ₹1,475.

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

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