Though the short-term outlook remains negative for Bajaj Finserv (₹1,639.80), we expect the stock to bounce back from a crucial support. Immediate support levels are at ₹1,595 and ₹1,524. A close below the latter can lead to a fall towards ₹1,240. Resistance appears at ₹1,729 and ₹1,876.

F&O pointers: Bajaj Finserv Nov futures closed at ₹1,642.15 against the spot price of ₹1,639.80. Open interest remained around 1.05 crore shares in the last 10 days with minor fluctuations. This signals the existence of long positions. Option trading indicates that the stock could move in the ₹1,600-1,800 range.

Strategy: Consider buying the November 1660-strike call, whose premium is ₹19.55. As the market lot is 500 shares, the strategy would cost ₹9,775, which would be the maximum loss. The breakeven point is ₹1,679.55.

Keep the initial stop-loss at ₹11. Shifted this to ₹18 if Bajaj Finserv opens on a positive note and sustains the gains for a few hours. If the premium moves past ₹25, the stop-loss can be shifted to ₹21. Aim for a target of ₹35.

Market is closed on Wednesday (Nov 20) for Maharashtra assembly elections. So, traders should be wary of time decay. Traders should constantly monitor the price movement and deftly adopt stop-loss to protect profit (or cut loss). If Bajaj Finserv opens with a considerable gap-up, say with a gain of over 3 per cent, traders can stay away from this strategy.

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

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