Technical Analysis

Take an interest in ICICI Bank

K S BADRI NARAYANAN | Updated on March 10, 2018 Published on April 30, 2017

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The outlook for ICICI Bank (₹279) remains positive. The long-term positive outlook will be reconfirmed if the stock manages to close above ₹315.5. In that event, ICICI Bank will see a new peak above ₹360.7. The stock appears to be achieving that feat given the current momentum. It finds immediate support at ₹268 and close below ₹252 will change the outlook negative for ICICI Bank. However, May 3 is crucial, as ICICI Bank will announce its Q4 and full-year results.

F&O pointers: The counter added 24.7 lakh shares (or 3.5 per cent) in open interests on Friday. Concentration of open interests in call and put options suggests that the stock may move between ₹290 and ₹270.

Strategy: Traders can consider going long on ICICI Bank futures with a stop-loss at ₹272 (on a closing day basis), for an initial target of ₹315. This strategy is for traders who can understand risk in futures market, as loss will be heavy if ICICI Bank swings wildly, particularly with the results announcement around the corner.

Conservative traders can consider buying ₹290-call, which closed with a premium of ₹5.65. As the market lot is 2,500, outflow works to ₹14,125. The position can be exited if the premium rises to ₹9 or dips to ₹2.5 and consider holding the call option for at least two weeks.

Follow-up: Hold Sun Pharma Call option recommended last week.

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Published on April 30, 2017
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