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The outlook for State Bank of India (₹313.60) remains positive. The stock finds immediate resistance at ₹330 and a conclusive close above that will lift SBI to new heights. The stock finds immediate support at ₹279 and only a close below ₹252 will alter the current positive outlook. While the stock may face intermittent volatile sessions ahead, we expect the undertone to remain positive.
F&O pointers: SBI May futures added over 2 per cent or 12.57 lakh shares in open interest. SBI futures also maintained its premium, signalling longs build-up. Options trading indicates that the stock could move in a range of ₹300-330 as ₹300-put and ₹330-call carry high open interests.
Strategy: Traders can consider a bull-call spread on SBI, using ₹315-strike and ₹325-strike calls. They closed with a premium of ₹11. 9 and ₹7.75 respectively. Traders will have to incur an initial outflow of ₹4.15 a contract. As the market lot is 3,000 shares, this will cost ₹12,450, which would be the maximum loss one can suffer. A maximum loss will happen if SBI closes below ₹315. A maximum profit will be achieved if premium rises ₹5.85 a contract. This will happen if SBI closes above ₹325. We advice traders to hold the position till the expiry.
Follow-up: Stop loss would have triggered for Indusind Bank.
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