Comments
The long-term outlook for Maruti Suzuki will remain bullish as long as it stays above ₹2,645. However, after the sharp run-up, the stock is likely to come under pressure in the short term. Maruti Suzuki finds immediate support at ₹2,875, a close below which could take the stock lower to ₹,2750. On the upside, the stock can target ₹3,150.
F&O pointers: The counter added fresh long positions on Friday. Option trading also indicates a positive bias and limited downside for the stock. However, the stock may find it difficult to move past ₹3,000.
Strategy: Traders can consider a bearish calendar spread on Maruti Suzuki. This can be initiated by buying the near-month ₹3,000 call and simultaneously selling the farther month (October) call of the same strike. They closed at a premium of ₹43 and ₹91 respectively. The position will entail an initial inflow of ₹48. The maximum gain would occur if Maruti Suzuki declines sharply, and both options became worthless, or if the stock rises sharply. In either case, the gain would be ₹6,000.
However, the loss could be unlimited, if the underlying stock remains range-bound during the current month and rises sharply in October.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.