The short-term outlook remains positive for the stock of Hindalco Industries (₹614.85). It finds an immediate support at ₹564 and major one at ₹503.

On the other hand, if the stock sustains the current momentum, Hindalco can rally towards ₹644, surpassing the current peak of ₹618. After a strong rally in the last few days, we expect moderation in the short term. 

F&O Pointers: Hindalco January futures closed at ₹618.70 against the spot price of ₹614.85. Besides, the counter saw a steady accumulation of open positions from 5.05 lakh shares to 3.58 crore shares, signaling accumulation of long positions.  Option trading indicates that the stock could move in the ₹550-650 range.

F&O strategy: We advise traders to consider bear-put strategy, as we expect moderation in the current rally. The strategy can be initiated by buying 620-strike put and simultaneously selling 600-strike put. As these options closed with a premium of ₹24.50 and ₹15.15 respectively, the strategy would cost traders ₹9.35/lot or ₹13,090.

The premium paid (₹13,090) will be the maximum loss and that would occur if Hindalco sustained the current momentum and holds above ₹620. On the other hand, a profit of ₹14,910 is possible if the stock dips to ₹600 or below.

We advise traders to keep stop-loss at ₹4 and hold the position for at least two weeks.

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

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