The long-term outlook for LIC Housing Finance appears negative, though the stock may show some resilience in the short and medium term. It rules at a crucial level of ₹398. If the stock sustains above ₹398, it can bounce back towards ₹476. A close above ₹476 will alter the current negative outlook. The stock finds an immediate resistance at ₹425. But a a close below ₹398 can drag LIC Housing Finance towards ₹345.
F&O pointers: The LIC Housing Finance futures added a little over two lakh shares on Friday along with a rise in share price. The counter witnessed higher trading interest last Thursday, signalling value buying. Option trading indicates a movement in a range of ₹380-420.
Strategy: Traders can consider a bull-call spread on LIC Housing Finance that can be initiated by selling ₹410-call option and, simultaneously, buying the ₹400-call option. The options closed with a premium of ₹14.20 and ₹9.75 respectively. That means, to adopt this strategy, one has to shell out ₹4.45/contract.
As the market lot is 4,400 shares/per contract, it works out to ₹19,580. This would be the maximum loss one can suffer, which can happen if LIC Housing closes at or below ₹400 at the time of expiry. But a profit of ₹24,420 is possible, if LIC Housing Finance closes above ₹410.
We advice traders to hold on to the position for at least two weeks.
Follow-up: Bank of India moved on expected lines, traders can book profits as recommended.
KS BADRI NARAYANAN
Thank you for being a loyal user of Portfolio.
Portfolio will be a paid section hereon.
Please Subscribe to get access to one of our early bird packs.
Or click on Free Trial to get 14 days free trial.
What You'll Get
-
Web + Mobile
Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.
-
Exclusive Portfolio and Investment Advice, Banking, Lifestyle and Specials
Get diverse set of perspectives from our trusted experts on Portfolio, Banking, Economy, Environment and others.
-
Ad free experience
Experience cleaner site with zero ads and faster load times.
-
Personalised dashboard
Customize your preference and get a personalized recommendation of stories based on your interest.
Published on
September 07, 2019
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
Please Email the Editor