The long term outlook for Maruti Suzuki India (₹6,773.1) remains positive, while in the short term, it will remain volatile. Only a close above ₹7,660 or below ₹5,480 will dictate a clear trend for the stock. Till then, Maruti will move in the range with a high bout of volatility. Short-term resistance and support appear at ₹7,010 and ₹5,970 respectively. A close above ₹7,660 could trigger a fresh rally in the stock and lift it towards ₹8,250. Similarly, a close below ₹5,480 could weaken the stock towards ₹4,990.
F&O pointers: The Maruti October futures contract witnessed a steady accumulation of open positions in the last two weeks. During the last series, it recovered from a low of ₹5,830.85 to ₹7,188.95 along with increase in open interests. This signals a positive bias, as traders are willing to hold on to the position. Option trading indicates a ₹6,000-7,500 range.
However, this strategy can result in heavy loss if the stock moves violently in any one direction — up or down. A close below ₹5,708 or above ₹7,692 will hurt the position. This strategy is strictly for traders who can withstand wild swings and have enough money to meet margin commitments.
Follow up: Hold ITC October call as recommended.