The outlook remains positive for the stock of Adani Ports and Special Economic Zone (APSEZ) (₹1,078.55). If the current rally sustains, APSEZ can hit a high of ₹1,350.
On the other hand, APSEZ finds an immediate support at ₹1,017. A close below can weaken the stock towards ₹882. A breach of this will change the outlook negative again. We expect the stock to move in a narrow range with upward bias.
F&O pointers: APSEZ December futures closed at ₹1,085 against the spot close of ₹1,078.55, signalling the existence of long positions.
Despite the stock climbing from ₹833-level, the counter shed open interests at regular intervals. Open positions, from 5.29 crore shares on December 1, fell to 5.01 crore shares currently. Option trading indicates a wide range of ₹800-1,200.
Strategy: We advise traders to consider a bull-call spread on APSEZ. This can be initiated by selling 1100-call and simultaneously buying 1080-call. These options closed with a premium of ₹30.85 and 39.10.
As the market lot is 800 shares, this strategy would cost traders ₹6,600, which would be the maximum loss. Maximum loss would happen if APSEZ closes at or below ₹1,080 on expiry.
On the other hand, a profit of ₹9,400 is possible, if APSEZ closes at or above ₹1,100 on expiry. Keep the stop-loss at ₹2,500.
Follow-up: HDFC Asset Management swung wildly last week, hitting the target. Those who are still holding, can exit.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading