The stock of Life Insurance Corporation of India (LICI) (₹985.50) is ruling at a crucial level. Immediate support levels are at ₹891 and ₹815. A close below the latter will change the outlook negative.

Immediate resistance levels are at ₹1,019 and ₹1,123. A conclusive close above the latter will trigger a fresh rally, possibly to ₹1,475.

F&O pointers: LICI was just included in the derivative segment and has just one-day history. The LICI December futures is ruling at ₹991.80 against the spot price of ₹985.50, signalling accumulation of long positions. Option trading indicates a trading range of ₹900-1,100.

Strategy: Consider buying LICI 1000-call, which closed with a premium of ₹28.55 on Friday. As the market lot is 575 shares, this would cost ₹16,416.25, which would be the maximum loss.

Keep the initial stop-loss at ₹15. Revise this upwards to ₹25 if the premium moves past ₹31 and to ₹30 on rise above ₹35. Traders can aim for an initial target of ₹45. Make sure to move the stop-loss to protect the profits or cut losses. This strategy is ideal if the stock opens on a flat-to-marginal negative note on Monday.

Investors with high risk appetite can buy LICI futures with an initial stop-loss at ₹927. Trail the stop-loss to ₹985 if the contract moves past ₹1,000. Aim for a target of ₹1,475 with trailing stop-loss. Consider rolling over to the next series if the target is not met during the ongoing expiry.

Follow-up: Traders can book profit on SRF 2200 December call.

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

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