Mphasis’ stock (₹1,895.05), which had a negative short-term outlook, has entered the neutral zone, thanks to a sharp recovery. The stock now finds immediate support at ₹1,784 and ₹1,700.

The long-term bullish outlook will remain intact until the stock rules above ₹1,530. The stock finds an immediate resistance at ₹1,984. A close above ₹2,060 will reconfirm the long-term bullish pattern. We expect the stock to move in a sideways movement with a positive bias in the short term.

F&O pointers: The futures witnessed a strong rollover of about 97 per cent to July series. Mphasis July futures, at ₹1908.55, is at a premium over the spot price of ₹1,895.05. Option trading indicates that the stock could move between ₹1,800 and ₹2,000.

Strategy: Consider buying the 1920-strike call option. It closed with a premium of ₹63.90. As the market lot is 275 shares, this strategy would cost ₹17,572.50. This would be the maximum loss in this trade which will happen if Mphasis fails to cross ₹1,920 on expiry.

On the other hand, profit potentials are high, if the stock moves sharply in this series. A close above ₹1,983.90 will start turning the position profitable. Hold the position with a stop-loss at ₹40, which can be shifted to ₹60 if the stock opens and stays positive in the first hour of trade on Monday. Stop-loss can then closely track the spot movement to protect profits. Book profits between ₹110 and ₹115.

Follow-up: Traders could consider holding NTPC call option for two more weeks, as the stock moved on expected lines.

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

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