Should I buy Godrej Consumer future July contract at current level? What should be the target and stop-loss for this trade? – Palani Shanmugam

Godrej Consumer Products (₹1,410): The stock, which has been on a decline over the past few weeks, seems to have ended the correction phase. It has been gaining this week on the back of the support at ₹1,350, where the 20-day moving average coincided.

The price action on the daily chart shows that the broader trend is bullish. The upswing so far this week indicates that the stock has resumed its upward trajectory. In the short term, the stock of Godrej Consumer Products can appreciate to ₹1,500.

Consequently, the future contracts on the stock, too, can gain. The July contract is now trading at around ₹1,416 and could rally to ₹1,500. That said, rather than buying at the current level, you can go long on a dip.

You can buy Godrej Consumer Products July futures when its price dips to ₹1,395. Place initial stop-loss at ₹1,360. When the contract rises to ₹1,450, move the stop-loss higher to ₹1,410. Tighten the stop-loss further to ₹1,445 when the price hits ₹1,475. Book profits at ₹1,490.

Alternatively, you can consider buying a call option. We suggest 1,420-strike July call option, which is now trading at around ₹47. You can go long now and buy another lot if the stock price dips to ₹1,400. Exit one lot at the prevailing price when the stock price touches ₹1,470. Liquidate the remaining lot at the going rate of the option when the stock hits ₹1,490.

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