Maruti Suzuki (₹2269): The long-term outlook remains positive for Maruti Suzuki, as long as the stock trades above ₹1,974. However, in the short term, the stock can move in a narrow range with negative bias. Maruti finds immediate support at ₹2,210, a close below which will drag the stock to ₹2,061. However, a close above ₹2,335, itsimmediate resistance, can take it to ₹2,520 levels.

F&O pointers: The counter added just 21,000 shares or 0.71 per cent on Friday amidst volatility. Traders’ lack of interest to roll over their positions was quite evident. Option trading also indicates a negative bias with emergence of call writers. It indicates a range of ₹2,200-2,500.

Strategy: Traders can consider short straddle on Maruti, with the stock expected to move in a narrow range.

This can be initiated by selling ₹2,250 call and put. The options closed with a premium of ₹100.85 and ₹58.6 respectively. The maximum profit (premium received), works out to about ₹19,930. To achieve maximum profit, Maruti Suzuki should settle at ₹2,250 at the time of expiry.

The loss could, however, be unlimited if Maruti Suzuki moves in either directions (up or down) sharply. A close above ₹2,410 or below ₹2,090 would start impacting the position adversely. Traders can exit if the combined options' premium touches ₹225. We advise traders to hold the position for at least two weeks.

Follow-up: Last week, we advised traders to a strategy on Reliance Power involving April and May month options. Traders can hold the long Reliance June call position.

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