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The stock of Biocon (₹586.8) rules at a crucial level. Though the long-term outlook appears bright, the stock needs to close above ₹623 to regain the bull run. The stock finds an immediate support at ₹541 and a major one at ₹447. A close below the latter will change the long-term outlook to negative.
The stock is expected to remain weak in the short-to-medium term.
F&O pointers: Biocon August futures witnessed a marginal accumulation of open interests on Friday along with rise in share price.
The counter witnessed a healthy roll-over of long positions from July to August series. Option trading indicates that the stock can move in the ₹560-620 range.
Strategy: Traders can consider going short on Biocon futures. While stop-loss can be placed at ₹593, traders can aim for an initial target of ₹541. Stop-loss can be shifted to ₹573 if the stock opens on a weak note. This recommendation is for traders who can withstand the risk and wild swings; the market lot for Biocon futures is 900 shares.
Traders who wish to take less risk can consider buying ₹560-put, which closed with a premium of ₹13.60. While maximum loss can be ₹12,240 (premium paid), profit potential is huge. Traders can exit if a position turns into a profit of ₹12,000 or a loss of ₹7,500.
Follow-up: Exit TVS Motor position with profits.
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