The stock of NTPC (₹123.75) is ruling at a crucial level. The stock needs a conclusive close above ₹125.50 to maintain the bullish momentum. If NTPC manages to close above ₹125.50, the stock has the potential to reach ₹136 and ₹148. The stock finds immediate support at ₹117 and a major one at ₹109. A close below the latter will alter the current bullish view on NTPC and a close below ₹98 will trigger a fresh fall. We expect the stock to move in a narrow range in the short-term, before making a clear trend. However, the overall undertone remains positive for NTPC.
F&O Pointers: NTPC futures shed open position in the last eight days despite the stock moving up from ₹114 to ₹124. NTPC September futures closed at ₹123.75, same as the underlying stock price. This signals that traders prefer to reduce positions on every rise. Option trading indicates that the NTPC stock could move in a range of ₹115-130.
Hold the position until at least second week of October. Traders could exit the position if loss reaches ₹9,500.
Follow-up: Advise traders to book profits in Gail India strategy (both bull-call spread and long futures).
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.