F&O Strategy: Buy IRCTC Call Option

The stock of IRCTC (₹663.60) has been moving in a narrow range in the last few weeks between ₹600 and ₹750. IRCTC finds resistance at ₹716 and ₹747. A close above the latter will trigger a fresh rally that can change even the medium outlook positive.

On the other hand, there are supports at ₹627 and ₹601. In the short term, we expect the stock to move in a narrow range with a positive bias.

F&O pointers: IRCTC November futures closed at ₹663.80 almost on par with the spot price of ₹663.60. Option trading indicates that IRCTC can move in a range the ₹650-700 range.

Event: IRCTC board will meet on November 7 to consider Q2 results and interim dividend. If dividend is announced, November 17 could be set as the record date.

Strategy: Consider buying 670-call, which closed with a premium of ₹14.65. As the market lot is 875 shares, this will cost traders ₹12,818.75, which will be the maximum loss. The maximum loss would happen if IRCTC fails to move above ₹670 on expiry. A close above ₹684.65 would turn the position positive.

Due to result announcement, the stock may turn volatile. We advise traders to hold the trade with a stop-loss at ₹5.50. Traders can aim for an initial target of ₹35. Stop-loss can be shifted to ₹15 if the stock opens on positive note and premium moves past ₹18.5.

Follow-up: Recommendation on Polycab hit the target on Monday itself. As we said, the stock turned volatile and recovered sharply.

Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading