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The short and medium-term outlook remains cautious for Multi Commodity Exchange of India (₹754.35). The stock finds an immediate support at ₹701 and a crucial one at ₹667. MCX finds an immediate resistance at ₹836 and a major one at ₹908. A close above ₹1,091 will change its long-term outlook to positive. We expect the stock to remain volatile with a positive bias in the short term.
F&O Pointers: The MCX April futures shed open interests along with rise in share price. This signals that investors are cautious on MCX. Little cues available indicate a positive bias and resistance at ₹800.
Strategy: Traders can buy MCX futures with an initial target of ₹836. Stop-loss can be placed at ₹736 initially and can then be shifted to ₹760 once the stock moves past that level.
Long-term investors with a strong risk appetite and who can withstand wild swings, could even consider rolling over the positions for a few months with a target of ₹ 908. Risk-averse investors can consider buying ₹760-call that closed at ₹24.20. As the market lot is 500 shares, one has to fork out ₹12,100. This would be the maximum loss one can suffer, and that would happen if MCX dips to ₹760 at the time of expiry. Traders can consider exiting the position if the option premium value dips to ₹6,500 or book profit if the option premium value rises to ₹20,000. We advice traders hold the position for at least two weeks.
Follow-up: As suggested, hold the call option position of Infosys; it is scheduled to declare its FY result on April 13.
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