F&O Strategy: Buy Infy 1900-call

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After a sharp rise since May, the stock of Infosys (₹1,879.60) slipped post Q2 results. It is currently at a strong resistance. However, the long-term outlook remains positive as long as it stays above ₹1,533. The stock finds support at ₹1,791 and ₹1,652.

We expect the stock to breach the resistance again. If that happens, Infosys will mark new high and has the potential to touch ₹2,250. 

F&O pointers: Infosys October futures is ruling at ₹1,863.35 and November futures is at ₹1,875.50 against the spot price of ₹1,879.60. The futures are at a discount with respect to spot price due to ₹21 dividend the company announced. October 29 is the record date. Option trading indicates the stock could move in the ₹1,700-2,000 range.

Strategy: Consider buying 1900-call of November series, which closed at a premium of ₹40.75. As the market lot is 400 shares, this strategy would cost ₹16,300, which would be the maximum loss. It will happen if Infosys fails to cross ₹1,900. The break-even point is ₹1,940.75.

Keep initial stop-loss at ₹12 that can be shifted to ₹30 if the premium rises to ₹50. Traders can aim for a target of ₹100. Adjust the stop-loss as per your risk tolerance as the price goes up. Hold the position for three weeks.

Follow-up: Stop-loss would have triggered in IRCTC recommendation.

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