The stock of Voltas (₹247.3) is ruling at a crucial level. The long-term positive outlook remains intact, while the short-term outlook is negative. To alter this, the stock has to manage a strong close above ₹247. The next resistance will be at ₹269. A close above ₹291 will confirm the positive break for the stock that can take it to ₹345 initially. If the stock fails to sustain the momentum, it will find immediate support at ₹222.

F&O pointers: Despite sharp gains on Friday, Voltas March futures shed open interests, signalling profit booking.

Strategy: Traders can consider a bull call spread on Voltas. This can be initiated by buying ₹250-call and simultaneously selling ₹260-call. These options closed with a premium of ₹8.90 and ₹5.30 respectively. That means, one has to shell out ₹3.60 or ₹5,760 (market lot is 1,600) to initiate the strategy. This is the maximum loss one can suffer on this strategy and that happens if Voltas settles between ₹250 and ₹260 at the time of expiry. A maximum profit of ₹10,240 or ₹6.4/contract is possible, if Voltas manages to close at or above ₹260 before expiry.

Follow-up: Last week, we had advised a long on Asian Paints. The stock is moving on expected lines and investors can hold it with a revised stop-loss at the level of ₹875.

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