The short-term outlook remains positive for the stock of Hindalco Industries (₹614.85). It finds an immediate support at ₹564 and major one at ₹503.
On the other hand, if the stock sustains the current momentum, Hindalco can rally towards ₹644, surpassing the current peak of ₹618. After a strong rally in the last few days, we expect moderation in the short term.
F&O Pointers: Hindalco January futures closed at ₹618.70 against the spot price of ₹614.85. Besides, the counter saw a steady accumulation of open positions from 5.05 lakh shares to 3.58 crore shares, signaling accumulation of long positions. Option trading indicates that the stock could move in the ₹550-650 range.
F&O strategy: We advise traders to consider bear-put strategy, as we expect moderation in the current rally. The strategy can be initiated by buying 620-strike put and simultaneously selling 600-strike put. As these options closed with a premium of ₹24.50 and ₹15.15 respectively, the strategy would cost traders ₹9.35/lot or ₹13,090.
The premium paid (₹13,090) will be the maximum loss and that would occur if Hindalco sustained the current momentum and holds above ₹620. On the other hand, a profit of ₹14,910 is possible if the stock dips to ₹600 or below.
We advise traders to keep stop-loss at ₹4 and hold the position for at least two weeks.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.