The long and medium-term outlook for Vedanta (₹102.15) remains negative. However, in the short term, we expect the stock to show some resilience. Vedanta finds immediate support at ₹94 and the crucial one at ₹86.5. A close below the latter level can take Vedanta to new depths. On the other hand, it finds immediate resistance at ₹108 and a close above will take it to ₹131. A close above ₹147 will change the medium-term outlook to positive.

F&O pointers: From November, the lot size of Vedanta will double to 4,000 per contract from the current level of 2,000. Despite that, the counter witnessed a healthy 20 per cent rollover to November series. Trading in option indicates strong support at ₹100.

Strategy: Traders can consider a bull-call spread strategy on Vedanta using November contracts. This can be constructed by selling ₹110 November call options and simultaneously buying ₹105 November call options. The options closed with a premium of ₹4.1 and ₹5.2 respectively.

So, this strategy will entail an initial outflow of ₹1.1 a contract (or ₹4,400). This will be the maximum loss one could suffer from this strategy. However, a maximum profit of ₹15,600 (or ₹3.9/contract) is possible in this strategy should Vedanta close at or above ₹110 at the time of expiry.

Two crucial events could swing Vedanta’s share price sharply on either side. One, the company is coming out with its quarterly and half-year results for the period ended September 30, 2015 on October 27 (Tuesday) and Bihar election results (November 8). Though expectation is low from Vedanta on the financial front, any positive surprise could trigger a rally in the stock.

Traders can exit if the loss mounts to the level of ₹1,200.

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