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The long-term outlook remains positive for Arvind, as long as it trades above ₹245. After recording a new peak at ₹341.5 recently, the stock has come under pressure. The stock finds immediate resistance at ₹334 and support at ₹303. Subsequent support is at ₹280. A close below ₹280 can trigger a sharp fall to ₹245.
F&O pointers: The counter witnessed moderate rollover of 22 per cent to October series. Current month option trading indicates limited upside. October options are not active.
Strategy: Traders could consider selling next month the ₹350 call that ended at ₹6.40. Maximum profit in this strategy is the premium received, which works out to ₹12,800.
This will occur if Arvind closes below ₹350 at the time of expiry, which is a month away. However, the loss could be unlimited if Arvind rallies sharply. Hence, only traders who can bear the risk should follow this strategy. Writing options also involve higher margin commitments.
Traders can consider exiting the position if the loss touches ₹4,500 or the underlying stock moves past ₹334.
Follow-up: Last week, we advised traders calendar spread on Maruti. Traders can consider holding the (short) position and exit the long position on any upside from here.
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