The long- and medium-term outlook for SAIL (₹33.7) remains weak. The stock finds a crucial support at ₹30. A conclusive close below ₹30 will trigger fresh selling that could take SAIL towards ₹25 level. The stock finds an immediate resistance at ₹37 and the next one at ₹44.5. Only a conclusive close above ₹62.9 will change the medium-term outlook to positive for SAIL. We expect the stock to move in a range with positive bias in the immediate future.
As the risk is high, this strategy is suitable for traders who can withstand volatility and have deep pockets to meet margin commitments.
Alternatively, traders who are a little conservative can consider selling ₹32-strike put, which closed with a premium of ₹0.55. Maximum profit would be ₹6,600. Hold the positions till expiry.
Follow up: LIC Housing moved on expected lines and had provided profit opportunities to traders.