Maruti Suzuki (Rs 1,606.1): The long-term outlook remains positive for Maruti Suzuki, as long as it stays above Rs 1,315. However, in the short-term, the stock can turn weak. Key support and resistance are placed at Rs 1,509 and Rs 1,670 respectively.

A close below Rs 1,509 will trigger a fresh fall. In that event, the stock could touch Rs 1,482. On the other hand, a conclusive close above Rs 1,670 will trigger a fresh rally in the stock that could take it to astronomical heights.

F&O pointers: Maruti Suzuki saw an accumulation of open positions on the short side though the Maruti June futures is trading in premium of over Rs 10 with respect to the spot close of Rs 1,605.6. Both puts and calls witnessed accumulation of open interest, except 1,600 put, which saw a marginal decline. This indicates that the stock could head below that level.

Strategy: Traders could consider bear put strategy on Maruti Suzuki. This can be initiated by selling 1,500 put and simultaneously buying 1,600 put. They closed with a premium of Rs 14 and Rs 46.4 respectively. Maximum profit in this strategy is Rs 67.6 and the loss is Rs 32.4 a contract.

Maximum profit occurs if Maruti Suzuki closes at or below Rs 1,500. On the other hand, maximum loss occurs if Maruti closes above Rs 1,600.

Hold this strategy till the expiry or till Maruti hits Rs 1,500. Traders should bear it mind that buying and selling the options should happen simultaneously.

Follow-up: Last week, we advised bear put spread in RCom. The position is in neutral. Traders could consider holding it till the expiry.

( Note: Feedback or queries (on positions) may be sent to > blfuturesoptions@gmail.com by Sunday noon. Replies will be published on Monday.)

Related Topics
comment COMMENT NOW