Technical Analysis

Bull put spread on Idea Cellular

KS Badri Narayanan | Updated on January 23, 2018 Published on May 03, 2015

3idea_col.eps



The outlook remains positive for Idea Cellular. The stock has support at ₹165 and resistance at ₹184. A conclusive close above the resistance will trigger fresh rally in the stock. In that event, it could test new high, above ₹204 levels. But, inability to sustain ₹165 has the potential to drag Idea Cellular to ₹144.

F&O pointers: Idea futures, at 65 per cent, witnessed higher rollover into May series. Option trading indicates a stiff resistance at ₹190 and ₹200 zone and the support at ₹170.

Strategy: We advice traders to consider bull put spread on Idea Cellular. This can be initiated by selling ₹185-put and simultaneously buying ₹175-put, which closed at ₹12.90 and ₹7.2 respectively.

This strategy will ensure an inflow of ₹5.7/contract (or ₹11,400) and that would be maximum profit one can derive from this strategy. For that to happen, Idea Cellular should close at ₹185 or above at the time of expiry. On the other hand, a close below ₹175 will hurt the position. In that case, a maximum loss of ₹4.3/contract (or ₹8,600) will occur. We advise traders to quit the position if the loss mounts to ₹3,500.

Published on May 03, 2015

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.