Lodha Developers (formerly know as Macrotech Developers) is ruling at a crucial level. Supports are at ₹1,170 and ₹ 1,082. Resistances are at ₹1,300 and ₹1,422. The stock has been moving in ₹1,000 and ₹1,300 range. It has to break this range for clear direction. In the short term we expect Lodha to move in the narrow band with positive bias.
F&O pointers: Lodha November futures closed at ₹1,211.50 against the spot price of ₹1,209.50. The counter witnessed unwinding of positions in the last few days. The narrowing of premium between futures and the spot price signals unwinding of long positions. Option trading indicates that the stock could move in the ₹1,100 and ₹1,360 range.
Strategy: Traders can buy Lodha 1220-call that closed with a premium of ₹18.95. As the market lot is 450 shares, this would cost traders ₹8,527.50, which would be the maximum loss that will happen if Lodha fails to sustain ₹1,220. However, profit potentials are high, if there is a sharp rise immediately.
Keep the stop-loss at ₹12 initially. Shift it to ₹18, if Lodha opens on flat-to-positive note. Traders can aim for a target of ₹27. Use the stop-loss prudently to protect the profits. If the stock opens sharply lower or higher, traders can stay away from this strategy.
Follow-up: IRCTC 710-call hit the target but turned around after that. Those who have missed out the opportunity can hold the position with a trailing stop loss at ₹6.5.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.