The stock of Nippon Life India Asset Management Company (NAM-India) (₹276.) is ruling at a crucial level. The stock finds immediate support at ₹249 and the crucial one at ₹215. A close below the latter will change the long as well short-term outlook negative for NAM-India. On the other hand, the stock finds immediate resistance at ₹293 and the next one at ₹315. A close above ₹344 will confirm the long-term outlook positive.

Event: The company will announce its quarterly result on July 28. Coincidentally, the monthly derivative contracts expire on July 28 and so, volatility could go up in the coming days.

F&O pointers: The counter has witnessed unwinding of positions along with fall in share price. This indicates traders cut their long positions. A little cue available from option trading indicates that the stock could move in a range of ₹260-300.

Strategy: We advise traders to consider long-strangle on NAM-India. This can be imitated by simultaneously buying 285-call and 260-put. These options closed with a premium of ₹4.80 and ₹2.70 respectively. As the market lot is 1,600 shares per lot, this would cost traders ₹12,000, which will be the maximum loss, and this will happen if the stock ends July expiry between ₹285 and ₹260.

On the other hand, profit potential is high if the stock surges sharply on either one side. We advise traders to exit with a profit of ₹12,000 or exit if loss mounts to ₹8,000. Holding the position till settlement day is desirable.

Follow-up: We advised traders to buy NTPC 146 call. As the stock moved on expected lines, we advise traders to book profit.

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

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