Comments
PNB (₹134) looks promising for the long term. The stock rules near its support level. If it sustains at the current level, it can go up to ₹152 and then to ₹170.
F&O pointers: The PNB September futures shed 5.84 lakh shares in open interest on Friday. Option trading indicates a resistance at ₹150.
Strategy: Traders can consider bull-call spread on PNB using September contracts. This trading strategy is best suited if one feels that the price of the underlying asset will go up in the near term. This can be initiated by buying ₹135 call and simultaneously selling ₹145 call. They closed with premiums of ₹5.75 and ₹2.25 per contract respectively. This strategy involves an initial outflow of ₹3.5(₹7,000), which could be the maximum loss one can suffer. A maximum profit of ₹13,000 (₹6.5) is possible if the stock closes at or above ₹145 at the time of expiry. The strategy can incur loss if the stock closes at or below ₹135 at the time of expiry. We advice traders to hold the position till expiry or until the loss mounts to ₹3,500.
Investors with long-term horizon can also consider investing in the futures and rolling it over for at least two years. This strategy is only for investors who can withstand the volatility and will be able to pay mark-to-market margin. Stop loss can be kept at ₹112 initially. Besides, from November, the lot size will be doubled to 4,000 shares.
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.