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The long-term outlook remains negative for Bharti Infratel (₹259), as long as the stock stays below ₹289. The stock finds immediate resistance at ₹285 and a crucial one at ₹315. A close above the latter will change the medium-term outlook to positive for the stock. On the other hand, Bharti Infratel finds an immediate support at ₹234 and a close below that level will reconfirm the negative outlook on the stock.
F&O pointers: The counter saw unwinding of open positions on Friday, despite witnessing a gain in the underlying price. This is a signal that traders are not willing to carry over the positions and prefer to book even small profits. Options are not very active on Bharti Infratel; the little cue available indicates that it could go to ₹280 levels.
Strategy: We advice traders to buy a plain call strategy on Bharti Infratel by buying 265-call. This call closed with a premium of ₹4.45. As the market lot for Bharti Infratel contracts are 1,700 shares, this will cost traders ₹7,565. This will be the maximum loss one can suffer in this strategy if the stock fails to move past ₹269.45.
On the other hand, profit potential is very high if Bharti Infratel makes a strong up-move in this month itself. We advice traders to hold the positions for two weeks; exit if the loss mounts to ₹3,750 or at a profit of ₹5,500.
Follow-up: Hold Bank of India options (short) for one more week.
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