The long-term outlook remains positive for HCL Technologies (₹958.5), as long as the stock remains above ₹725. The stock finds an immediate support at ₹913 and the next one at ₹842. Immediate resistance appears at ₹1,010 and a close above ₹1,047 will trigger a fresh rally in the stock that can lift it to ₹1,250. We expect HCL Technologies to move in a narrow range before taking a clear direction.
F&O Pointers: HCL Technologies is one of the few counters that sees high rollovers to next series, signalling existence of long-term investors. This time too, the counter witnessed a healthy rollover of 96 per cent. The HCL Technologies April futures witnessed steady accumulation of open interest in the last two weeks, though the price has been moving in a narrow range. Option trading indicates that HCL Technologies can move in ₹900-1,000 range.
As the ₹1,060-call closed at a premium of ₹10.65, the maximum profit one can get from this strategy is ₹7,455 (market lot is 700 shares). The maximum profit will happen if HCL Technologies fails to cross ₹1,060. We advise traders hold the position for at least two weeks to get maximum benefits due to time decay. Traders could exit from this position, if the loss mounts to ₹5,500.
Follow-up: Sun TV, though the risk-reward ratio was largely in favour, the bull-call spread ended in loss.