The outlook for GAIL (₹294) looks promising for the long term. Immediate support is at ₹272. If the stock continues to trade at current levels, it can rise up to its next resistance of ₹340.

A close above ₹369 will confirm the stock’s long-term bullish trend. In such an event, the stock can test its crucial level of ₹438.

F&O pointers: The GAIL India futures witnessed a rollover of 75 per cent to October series. On Thursday, the October contract added 7.84 lakh shares (or 10 per cent) on Thursday, most of which was on the long side. The Gail October futures trade at a discount when compared to its spot price.

Strategy: Those with long-term horizon can consider investing in the futures of Gail India and rolling them over for at least two years.

Only traders who can withstand the volatility and pay mark-to-market margin should consider this strategy. Stop loss can be placed at ₹268. If the stock manages to close above this level, then the stop-loss can be moved up to ₹312. Investors will have to bear in mind that from November, the lot size of Gail contracts will be increased to 1,400 from 1,000 shares currently.

For traders, we recommend buying 310-call options. It closed at ₹5.80. Thus, the initial outgo will be ₹5,800, which will also be the maximum loss one can incur. Exit, if the loss mounts to ₹1,800 or profit rises to ₹6,200.

Related Topics
comment COMMENT NOW