Comments
While the outlook for the long term remains negative for YES Bank (₹275), it is positive for the short and medium term. The stock finds immediate resistance at ₹286 and a conclusive close above that could trigger a rally and take the stock to ₹336. A close below ₹237 will alter the medium-term positive outlook. The stock finds immediate support at ₹252.
F&O pointers: The counter witnessed unwinding of open positions on Friday that dragged the price from day's high to a low; open interest fell marginally on Friday. However, over the last week, YES Bank April futures saw a steady build up. Option trading indicates a trading range of ₹300-240.
Strategy: Conservative traders can consider a bull call spread strategy. This can be initiated by buying ₹260-call and simultaneously selling the ₹280-call that closed with a premium of ₹18.7 and ₹9.8 respectively.
The maximum possible profit and loss for a contract is ₹11.1 ₹8.9 respectively. As the market lot is 1,750, this will imply an outgo of ₹15,575, which would be the maximum loss. Maximum profit will occur if YES Bank closes at or above ₹280, while if it closes below ₹260, there is a risk of higher loss. We advice traders exit position if the loss mounts to ₹8,500 and hold the position for at least two weeks.
Traders with high-risk appetite can consider buying ₹280-call on YES Bank. They can exit the position if the premium rises to ₹15 or falls to ₹5.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.