The long-term outlook for the stock of LIC Housing Finance (₹495.4) appears positive, though it may be under pressure over the the short to and medium-term.
The stock finds an immediate resistance at ₹545 and support at ₹470. If LIC Housing Finance fails to sustain above the support, it could drop to ₹402. On the other hand, a conclusive close above ₹544 will change the short-term outlook to positive and take the stock higher to ₹670.
The premium paid initially (₹10,505) would be the maximum loss one can suffer from this position.
That will happen if LIC Housing Finance manages to stay at or above ₹490. But a stay below ₹480.45 will turn the position positive.
We expect the stock to remain weak in the short term.
Traders can exit from the position if the loss mounts to ₹6,500 or at a profit of ₹10,000. Consider holding the position for at least two weeks.