The long as well as the immediate term outlook for YES Bank (Rs.882.3) is positive. After moving sideways in the last three months, the stock may witness a break out. If the current trend sustains, YES Bank will touch Rs.1,025 and even Rs.1, 150.
For that to happen, YES Bank has to sustain above Rs.882 and conclusively close above Rs.892. Only a close below Rs.793 will negate the short-term positive outlook.
F&O pointers: YES Bank June futures added 4.5 lakh shares (or about 4.5 per cent over the previous day) in open positions on Friday. Option trading indicates that the stock could face resistance at Rs.900 while Rs.860 may act as a support.
Strategy: We advice traders to buy 900-strike call option. It closed with a premium of Rs.25.25 on Friday.
The maximum loss in the strategy is the premium paid, which works out to Rs.6,312.25, given the market lot of 250 a contract. However, profit could be unlimited, if YES Bank moves up sharply. We advise traders to exit from the position, if the premium slips to Rs.10. On the positive side, traders could set an initial target of Rs.75.
Follow-up: Investors can exit from SBI position, if the 280-call option premium slips to Rs.4 or rises to Rs.22.
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