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The short and medium-term outlook has turned positive for HDIL (₹90). The stock finds a crucial resistance at ₹96.60 and a close above that will take it to ₹108. HDIL finds an immediate support at ₹80.50, which is a very crucial level. A close below will change the immediate outlook negative for HDIL.
F&O pointers: The HDIL June futures shed open positions on Friday along with fall in share price, signalling some profit-booking. Option trading indicates that the stock could face strong support at ₹80 and resistance at ₹100.
Strategy: Traders with a high-risk appetite can consider going long on HDIL futures with a stop-loss ₹85.80. While the initial target is ₹97, traders with high-risk appetite could even wait till ₹108. Stop-loss can be shifted to ₹92, if HDIL futures closes above the level conclusively.
Those who wish to play safe can consider a bull-call spread on HDIL. This can be done by selling ₹95-call and simultaneously buying the ₹90-call of HDIL. The options closed with a premium of ₹3.95 and ₹5.10 respectively on Friday. That means, one has to spend ₹1.15 per option (or ₹9,200) to adopt the strategy.
While the maximum loss would be the premium paid (₹9,200), profit could be ₹30,800, if HDIL closes at or above ₹95 at the time of expiry. A close at or below ₹90 will affect the investors.
Follow-up: Hold Cipla positions with revised stop loss.
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