Future Perfect. Go long in Dabur

Go long on Dabur

The long and medium-term outlook for the stock of Dabur India (₹307) looks positive. The stock finds immediate support at ₹284 and the crucial one at ₹255. A conclusive close below the second support will alter the outlook to negative. However, if the current trend sustains, the stock maycan scale to a new high and has the potential to reach ₹377.

F&O pointers: The Dabur India August futures shed 1.4 lakh shares (or 1 per cent) in open interest on Friday. The spot and futures (August) prices are almost the same, pointing a neutral view. Options are not very active. However, with little cue available in option trading, the stock could move in the ₹270-320 range.

Strategy: We advice traders to go long on Dabur India, whose market lot is 2,500 shares. While stop-loss can be placed at ₹296 initially, this can be shifted to ₹307 if Dabur India closes above ₹312.

While conservative traders can aim for an initial target of ₹325, traders with a high-risk appetite can even look at a better target of ₹348 by rolling over the positions for successive months. Trading in Dabur options is not desirable due to liquidity concern; and time value will also erode premium valuation.

Follow-up: Hold Kaveri Seed positions, as mentioned in the previous week.