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The stock of Steel Authority of India (SAIL) closed at ₹62.2, finds an immediate support at ₹58.75 and the crucial one at ₹50.5. A close below the latter will change the outlook to negative for SAIL. On the other hand, the stock finds resistance at ₹66.75 and a conclusive close above that level could lift the stock towards ₹84 and a close above ₹95 will change the long-term outlook to positive for SAIL.
F&O pointers: SAIL April futures shed open interests along with fall in share price. This indicates that the counter may face some more pressure. Trading in option indicates that the stock may move in ₹60-70 range.
Strategy: Traders can consider buying ₹60-strike put on SAIL. It closed with a premium of ₹0.75. As the market lot is 12,000/contract, a trader has to shell out ₹9,000. A maximum loss will be the premium paid, which is ₹9,000. This will happen if the stock closes at or above ₹60.
On the other hand, profit potentials are high should SAIL shares weakens further. Move below ₹59.25, will make the position profitable.
We advise traders to exit the position if the premium rises to ₹20,000 or falls to ₹3,000. Try to hold the position till expiry.
Follow-up: Advise traders to exit from Indian Bank futures as the positions are currently out-of-the money.
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