The outlook for Indiabulls Housing Finance (₹1,281.7) remains positive. The stock finds strong support at ₹1,193 and resistance at ₹1,360. A close above the latter will re-confirm the positive outlook on the stock that could lift the stock above its all-time high level of ₹1,440. We expect the stock to sustain the current momentum.
F&O pointers: Indiabulls Housing Finance March futures added over one lakh shares in open interest on Friday and carries a healthy premium of about ₹10 over the spot price. This indicates build-up of long positions. Options, especially puts, are not very active. However, build-up in call options indicates that ₹1,320 would be crucial level.
Strategy: Traders can consider buying a plain vanilla call on Indiabulls Housing Finance. We advice traders to buy the ₹1,300-strike call, which closed with a premium of ₹37.50. As the market lot is 400 units, this will cost investors ₹15,000, which will be the maximum loss one could suffer. For that to happen, Indiabulls Housing has to close at or below ₹1337.50.
On the other hand, profit potential is huge if Indiabulls Housing Finance swings positively and swiftly. We advice traders to consider exiting the position if the loss mounts to ₹7,500 or profit rises to ₹12,500.
Follow-up: Last week, we had recommended put calendar spread on Arvind positions. We advice traders to hold Arvind ₹380 March puts for at least two weeks.
