The long-term outlook remains positive for Axis Bank (₹616.6). The stock finds immediate support at ₹542. A close below this level will change the short-term outlook to negative. On the other hand, a conclusive close above ₹627 will trigger a fresh rally in the stock. In that event, Axis Bank could reach ₹740.

F&O pointers: Post-Budget, Axis Bank March futures witnessed a drop in open interests despite a sharp surge in price value. This indicates limited upside for the stock. Option trading also points in the same direction as Axis Bank March ₹650-call witnessed heavy accumulation of open positions, indicating that the stock could find it difficult to breach that level.

Unwinding of put options suggests limited downside too.

Strategy: Traders can consider a bear-call spread strategy on Axis Bank. This can be initiated by selling ₹590-call and simultaneously buying ₹620-call. They closed with a premium of ₹40 and ₹20.6 respectively.

This strategy will ensure an initial inflow of ₹19.4/contract. That could be the maximum profit one can earn from this strategy. For that to happen, Axis Bank has to close at or below ₹590 at the time of expiry. A maximum loss of ₹10.6/contract could happen, if Axis Bank moves past ₹620. Selling options involve margin commitments. Market lot of Axis Bank is 500 shares.

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