The outlook for the stock of DLF (₹410.75) appears bullish now. The stock finds an immediate support at ₹390 and the crucial one at ₹359. A close below the latter will change the short- and the medium-term outlook negative. On the other hand, DLF finds an immediate resistance at ₹432 and the major at ₹598. A rally above these levels can change the long-term outlook too bullish.
F&O pointers: DLF witnessed a steady build-up in open positions. From 10.62 lakh shares, open interests jumped to 4.62 crore shares even as the underlying stock moved between ₹395 and ₹415. DLF December futures closed at ₹413.45 against the spot price of ₹410.75, with a decent premium, signalling additions of long positions. Option trading indicates that it could move between ₹400 and ₹420.
Strategy: This strategy is strictly for traders who can take risk and maintain margin commitments to withstand the volatility. One can go long on DLF futures with a stop-loss at ₹390, which can be shifted to ₹410, if the stock opens above ₹415. Traders can aim for a target of ₹432, while trailing the stop-loss suitably. Protecting the loss or profit is very important given the volatility of this stock.
Alternatively, traders could consider buying DLF 420 option between ₹10 and ₹13, and can look for a target of ₹16. Book loss if price falls to ₹9.
Follow-up: Traders can consider booking profits in bull-call spread on L&TFH. Those who went long on futures can hold the position with the stop-loss suggested.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.