The outlook in Nifty Next 50 (67,527.65) appears positive. The index finds an immediate support at 65,770 and the major one at 58,420. If it stays above the latter, the outlook will remain positive and the index can reach 72,000. 

F&O pointers: As it was introduced recently, the contract has little trading history. However, the bias is positive.

Strategy: Buy a deep out-of-money Nifty Next 50 70000-call. As the option closed at ₹1,425 and the market lot is 10, it will cost traders ₹14,250 , which would be the maximum loss. With the General Election result on June 4, the market could be volatile and if the outcome is as expected, indices can move up sharply. Exit the position at a profit of ₹8,000 or at a loss of ₹4,000, whichever happens first.

Follow up: Tata Power

The strategy on Tata Power (Diagonal calendar bull-call spread, published on May 12) would have given some nervous moments to traders as the stock swung sharply. Belying our expected maximum loss of ₹14,175, the sharp run-up till the penultimate week of May settlement means the loss would have peaked at around ₹38,140 (excluding charges), as Tata Power soared.

However, due to a fall in stock price during settlement week, the loss would have moderated to ₹24,300, considering the last traded price on Thursday. The loss would have further reduced to ₹3,375 on Friday as Tata Power June 420-strike rose to ₹30.40 as against recommended price of ₹26.70. We advise traders to hold the long 420-call for one more week with a stop-loss at ₹27. Shift the stop-loss to ₹32, if the premium moves past ₹36. Exit at ₹40. Risk-averse traders can exit on Monday with minimum loss.

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

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