The long-term outlook remains positive for IndusInd Bank (₹601.4), as long as it stays above ₹480. However, the short-term outlook appears negative. The stock finds immediate support at ₹565 and the next one at ₹535. Immediate resistance for IndusInd Bank appears at ₹618 and a conclusive close above ₹631 will trigger a fresh rally, which could take the stock beyond ₹700.

F&O pointers : Despite the IndusIndBank October futures witnessing unwinding of long positions on Wednesday, there are still a lot of long positions. There is not much trading activity in the option segment. However, a minor cue suggests a negative bias for IndusInd Bank, as puts witnessed unwinding of long positions.

Strategy : The best strategy for traders is buying puts. But puts are not active and whatever are available for trading are pricey and illiquid, too.

Hence, we advise that traders consider writing 640-call. In this strategy, the maximum profit is the premium received, which works out to ₹6,500. However, the loss could be unlimited if the stock moves above ₹646. Traders could consider closing out the position if the loss mounts to ₹4,500.

Traders who wish to take additional risk can also consider selling 650-call. This will entail a total inflow of ₹11,000. The position can be closed out if the loss mounts to ₹8,500 or the underlying stock hits ₹631. The market lot is 500.

A close above ₹655 will start pinching both positions adversely.

Note : The company is coming out with results on October 13. Hence, the stock could witness a sharp swing around that time.

However, we expect volatility to die down after the initial euphoria. So this strategy is for traders who can withstand the volatility. The daily volatility of 1.55 and the annualised volatility of 29.69 also indicate wild swings for the stock.

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