The long-term outlook for the stock of Indian Energy Exchange (IEX) (₹163.75) remains positive. But in the short term, the stock may see a sideways movement with a downward bias. The stock finds an immediate support at ₹153, which is a major one. A close below that will even change the short-term outlook to negative and that can push the stock towards ₹131. IEX finds an immediate resistance at ₹176 and a close above ₹210 can trigger the next leg of the rally.

F&O pointers: The counter witnessed a healthy rollover of 27 per cent to September series. The IEX September futures commands a marginal premium of ₹1, signalling the existence of long positions. Option chain indicates that the stock could move between ₹150 and ₹180.

Strategy: We advise traders to consider selling September expiry (writing) 190-call on IEX, which closed with a premium of ₹3.25. As the market lot is 3,750, this will ensure an inflow of ₹12,187.50, which will be a maximum profit in this strategy. The maximum profit will happen if the underlying IEX settles below ₹190 by the end of September expiry. A close above ₹193.25 will start hurting the position.

The loss could be manifold, if IEX rises sharply within this series. Besides, writing calls will involve higher margin commitments. So, this strategy is for traders who can understand risks involved and have deep pockets to withstand wild swings. Risk averse traders can stay away.

Follow-up: Though Tata Power moved on expected lines and hit a target of ₹240, it fell sharply on Friday turning the position negative. Traders who failed to book profits can exit now.

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

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