The stock of IRB Infrastructure Developers trades at a crucial level of ₹265. The long-term outlook will turn positive only if the stock closes above ₹291. In such a scenario, the stock can surpass its all-time high at ₹313, registered five years ago. However, we expect the stock to consolidate around current levels before moving up. In the short term, IRB is likely to move in the ₹235-275 band. A close below this band, can drag the stock down to ₹180.
F&O pointers: The counter added fresh long positions on Friday along with sharp surge in price. Over 11 lakh shares were added on Friday alone. Option trading indicates a strong hurdle at ₹280.
Strategy: Traders could consider writing ₹300 call which closed at ₹2.10. The maximum profit in this strategy will be the premium received, which works out to about ₹8,000. For that to happen, IRB has to settle at or below ₹300 at the time of expiry. The loss could, however, be unlimited if IRB surges above ₹300. The position will start to pinch if the stock moves above ₹302.10. In other words, trader’s position will get impacted on an up move of over 10 per cent from the current levels.
Traders can exit the position if the loss mounts to ₹5,000.