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Thanks to benign crude prices, the outlook for Bharat Petroleum Corporation (₹957) looks bright. The long-term outlook will remain positive as long as the stock stays above ₹840. The immediate support for BPCL appears at ₹895 and the next crucial one at ₹864. If the stock manages to sustain above ₹935, it can record new highs. In such an event, the next targets will be ₹1,033 and ₹1,144.
F&O pointers: The counter witnessed a healthy accumulation of open interests on Friday. Option trading indicates a range between ₹900 and ₹1,000 for the stock.
Strategy: Traders can consider a bull-call spread on BPCL. This can be initiated by selling 980 call (₹28.75) and simultaneously buying 960 call (₹ 36.5).
The initial cost will be ₹7.75 per contract. This is also the maximum loss one can suffer, if BPCL closes below ₹960 at the time of expiry.
Traders can earn a maximum profit of ₹12.25/contract if BPCL moves above ₹980.
Alternatively, traders with high risk appetite can go long on BPCL with a stop loss at ₹895 for a target of ₹1,143. Stop loss can be shifted to ₹965, if the stock closes above that level.
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