The outlook remains positive for the stock of ICICI Bank (₹1,232.90). It finds support at ₹1,190 and ₹1,055. A close below the latter will change the medium-term outlook negative. On the other hand, if the stock sustains above ₹1,190, it has the potential to reach ₹1,490.

We expect the positive trend to continue in the short term. However, the upcoming Budget on July 23 can trigger higher volatility. Besides, the company will declare its result on July 27. Though the current month contracts expire ahead on July 25, the stock will remain in focus due to the results.

F&O pointers: ICICI Bank July futures is at ₹1,236.50 against the spot price of ₹1,232.90. The healthy premium indicates existence of long positions. Option trading indicates that the stock could move in the ₹1,150-1,300 range.

Strategy: Traders can consider a long strangle on ICICI Bank as volatility is expected to shoot up. This can be initiated by simultaneously buying 1260-call and 1200-put, which closed at a premium of ₹10.25 and ₹7.15 respectively.

As the market lot is 700 shares, this strategy would cost ₹12,180, which would be the maximum loss. This will happen if the stock of ICICI Bank is stuck between ₹1,200 and ₹1,260 on expiry. But a close above ₹1,277.40 or a fall below ₹1,182.60 will turn the position positive. This trade can be reviewed on Budget day.

Follow-up: Hold Fin Nifty options till Budget though the position is slightly in the negative.

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

Related Topics