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The short-term outlook for the stock of Hero MotoCorp (₹3,098.5) remains positive. It finds an immediate support at ₹2,947 and the major one at ₹2,787. On the other hand, the stock faces resistance at ₹3,568.85. A close above the resistance will trigger a fresh rally that can lift the stock to new heights. We expect the rally to sustain in the near term.
F&O pointers: The Hero MotoCorp futures closed at ₹3,109.05 against the spot price of ₹3,103.25. The premium indicates the existence of long positions and the willingness of traders to carry over their long positions. Option trading indicates support at ₹3,000 and resistance at ₹3,200.
Strategy: Consider going long on Hero MotoCorp October futures, which closed at ₹3,109.05 on Friday. This strategy is strictly for traders who can withstand wild swings and can commit the required margin for futures contract. Initial stop-loss can be placed at ₹3,079 for an initial target of ₹3,215.
Stop-loss can be shifted to ₹3,100 if the stock moves past ₹3,130 and then to ₹3,130 when the stock closes above ₹3,145. Traders can book profits according to their risk-taking ability, as Hero MotoCorp is one of the volatile counters.
If the stock opens with considerable gap up or gap down, traders can stay away from this strategy. Strategy on options is not advisable given their higher premium now.
Follow-up: Though Marico opened the week on a weak note, it recovered sharply later. We advise traders to hold the 535-put recommended last week. It can be reviewed next week.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading
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