I have the following options: Bought Reliance 1360 call for ₹33 and Bought ICICI Bank 1290 call for ₹35. Please advise whether I should wait or leave – Nagaraj
Reliance Industries (₹1,295): The stock has been steadily declining in value since early October after facing resistance at ₹1,520. It has started today’s session on the back foot and has lost over 3 percent so far today. The bears are clearly in control.
Nevertheless, the price range between ₹1,285 and 1,300 is a good base for the stock, which offers some hope for the bulls. However, support does not necessarily mean a bullish trend reversal is around the corner.
Technically, only a recovery beyond ₹1,325 can be taken as a signal of a sustained rally. In such a case, the benefit can go up to ₹1,370. A rally beyond this level is no guarantee.
If the stock falls below ₹1,285, the bears may further reduce the price, possibly to ₹1,240 or ₹1,200. Overall, there are no encouraging signs for the bulls at the moment. Therefore, we propose to liquidate the option contract at the current level.
Consider buying call options only after the stock crosses ₹1,325.
ICICI Bank (₹1,270): The stock has been falling since last Wednesday. The price action indicates a further decline and the nearest support is at ₹1,250. At this point, it is a 50 percent probability that the stock can recover from the potential drop to ₹1,250.
If there is a rally from ₹1,250, the price may rise to ₹1,330. However, if the stock crosses the ₹1,250 support, the sell-off may intensify. Consequently, there may be a downtrend towards ₹1,225, the nearest notable support below ₹1,250.
Given the prevailing conditions, we recommend exiting the option and buying the same strike or a lower strike call when the price falls to ₹1,250.
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