Unitech (Rs 20.2): The long-term outlook remains negative for Unitech, as long as it stays below Rs 45. The stock finds immediate support at Rs 18.5 and is expected to reach that level. On the other hand, immediate resistance appears at Rs 24 followed by Rs 29.
F&O pointers: Unitech added over 10 lakh shares in open interest along with a fall in share price, indicating short build-up. Option trading also indicates a negative bias as 20-strike put shed open interest even as calls added more open positions.
Strategy: Traders can consider bear call strategy. This can be initiated by selling 17.5-strike call and buying 20-strike call. These closed at Rs 3.05 and Rs 1.3, respectively.
Maximum profit in this strategy is the difference between the premium, which works out to Rs 1.7 for a contract. For that, Unitech has to close near or below Rs 17.5. Maximum loss could be 80 paise, for which Unitech has to close above Rs 20.
Follow-up: Traders can consider holding short strangle position in Titan, though the position is marginally out-of-the money.
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