Indian Bank (₹271) has been on a correction mode ever since it recorded a 52-week high in February. The stock now rules at a crucial level. Indian Bank finds immediate support at₹258 and a close below ₹246 will alter the current bullish outlook on the stock. A close above ₹286 will reconfirm the bullish trend and can take the stock to new highs.

F&O pointers: The Indian Bank April futures accumulated huge positions on Friday despite the stock witnessing a heavy fall of over 4 per cent. This signals build up of short positions. Options are not very active. The little activity suggests that it could move within a ₹260-300 range.

Strategy: Investors with high risk appetite can consider buying Indian Bank futures, with a stop loss at ₹246 that can be shifted to ₹258 and to ₹282, if the stock closes above ₹270 on Monday. Exit the position at ₹298.

Risk averse traders can employ a bull-call spread strategy. This can be initiated by buying 270-strike call and simultaneously selling 280 call. As they closed at a premium of ₹10.65 and ₹6.7 respectively, the strategy will ensure an initial outflow of ₹3.95 per contract.

A maximum loss of ₹7,900 will happen, if Indian Bank closes at or below ₹270. On the other hand, a profit of ₹12,100 is possible if the stock closes at or above ₹280. Hold the positions till expiry day.

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