The stock of NTPC (₹143.7) is ruling at a crucial. One more conclusive daily close above ₹143 will turn the short-term outlook positive and it will take the stock towards ₹157. The stock finds a support at ₹130 and the next one at ₹120. A close below ₹120 will change the outlook negative. We expect the stock to sustain the momentum.

F&O Pointers: The NTPC futures, currently trading at ₹144.20, commands a little premium over the spot price of ₹143.70, signalling existence of long bias. The NTPC futures saw accumulation of open positions and it stands at strong 7.06 lakh shares. Option trading indicates a possible movement between ₹140 and ₹145.

Strategy: Traders could consider buying 146-strike call, which closed at a premium of ₹2.35. As the market lot is 5,700 shares, this strategy will cost traders ₹13,395, which will be the maximum loss one suffers. The maximum loss will happen if the stock of NTPC holds at ₹146 or below this level on expiry. The break-even price is ₹148.35 — a move above ₹148.35 will turn the position positive.

We advise traders to hold the position with initial stop loss at ₹1.25 which can be shifted to ₹2.30 when price touches ₹5. As NTPC is a low-volatile stock, time decay will start hurting position. Traders can book profit at ₹6, which means the underlying NTPC needs to hit ₹152. Traders can wait for two weeks and decide later.

Follow-up: We had advised investors to consider long strangle on SBI. The position is marginally positive. We advise traders to hold the position and review the position on a daily basis. Traders could consider booking profits if the combined option premium hits ₹13.50.

Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.

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