Adani Power (Rs 40): The stock of Adani Power is ruling at a crucial stage. A conclusive close above Rs 40.5 will change the medium-term outlook positive for Adani Power. In such a scenario, the stock will move towards Rs 58.7. However, only a close above Rs 68 will change the long-term outlook positive for Adani Power. Immediate support appears at Rs 36.2 and a close below Rs 32.5 will change the outlook negative.

F&O pointers: The Adani Power December futures added fresh long positions on Friday. It accumulated 6 lakh shares in open interest. Heavy build-up in put options indicates strong support for the counter at current levels. Trading pattern in call options also indicates Rs 40 as key level.

Strategy: Traders can consider going long on Adani Power futures with a stop-loss at Rs 38.75 for an initial target of Rs 50.5. Stop-loss can be shifted to Rs 40.5, if the stock opens on a positive note.

Alternatively, traders can also consider buying 42.5 call, which closed with a premium of Rs 2.10. As the market lot is 8,000, this will entail an initial outgo of about Rs 16,000. Stop-loss can be placed at Rs 1.45.

Traders with high risk appetite can even consider writing (selling) Rs 37.5 put. While the maximum profit could be around Rs 10,500 in this strategy, the loss could be unlimited if Adani Power weakens sharply. A dip below Rs 36.2 will start pinching the traders.

Follow-up: Last week, we advised traders to consider going long on NMDC futures. The position is still open. Similarly, the recommended 135-call option position is also open and is in the process of achieving our expected targets.

( Note: Feedback or queries (on positions) may be sent to >blfuturesoptions@gmail.com by Sunday noon. Replies will be published on Monday.)

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