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The long-term outlook for Asian Paints (₹867.1) remains positive. The stock finds immediate support at ₹830.
In the short term, Asian Paints may move in a range between ₹705 and ₹895. A breach of the upper band, which seems likely, can see the stock touch ₹1,000 levels, with intermittent resistances at ₹930 and ₹970
F&O pointers: The counter saw marginal accumulation of short positions on Friday. Option trading suggests that the stock could face resistance at ₹900 and support at ₹800.
Strategy: Traders can consider going long on Asian Paints futures while placing the stop loss at ₹830. The stop loss can be shifted to ₹851, if the stock opens on positive note on Tuesday. Hold the position if the stock manages to close above ₹875 for an initial target of ₹930.
Alternatively, risk-averse traders could also consider buying 900-March-call that closed with a premium of ₹14.10 on Friday. This will entail an outgo of ₹8,460 (market lot: 600) to initiate the strategy. While the maximum loss could be the premium paid, profit is unlimited in this strategy.
Exit the position if the loss mounts to ₹5,000.
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