F&O Buzzer| India Hotels gains amid volume breakout and long build up

At 10:49 am, Indian Hotels Company Ltd shares trade at Rs 622.50 up Rs 8.65 or 1.41 percent.

Indian Hotels Ltd shares have given a breakout with notable volumes on the daily charts. The stock has been in momentum in the last trading session and is expected to outperform the broader markets in the coming 4-5 sessions. According to Arun Kumar Mantri, Founder of Mantri Finmart, “The technical indicators also indicate a bullish up move is likely to continue. The support for the stock is around Rs 598, while resistance is at Rs 640-645 levels on the higher side.”

At 10:49 am, Indian Hotels Company Ltd shares trade at Rs 622.50 up Rs 8.65 or 1.41 percent.

Technical Data:

The stock is in a higher highs and higher lows cycle and has broken out above the recent resistance levels on the daily charts. Mantri notes that the recent price performance in the stock indicates strength and is expected to continue the positive momentum in the coming days as well. “The counter is trading comfortably above its 21, 50, 100, and 200 DEMA on daily as well as weekly charts, indicating strength in the stock. Among the leading indicators, Parabolic SAR and Heiken candlesticks indicate a positive trend on both daily and weekly charts,” he added.

Mantri recommends taking a long call option strategy to capture the upside momentum. Trade details are as follows:

Trade Details:

Position: BUY INDHOTEL JUNE 620 CE
Entry: Rs 10-11
Target: Rs 19-22
Stop Loss: Rs 6
Holding Period: 5-6 trading sessions

Technical chart of Indian Hotels showing volume breakout in the counter on Friday| Source: Arun Mantri

Also read: Option Strategy of the day | Long build up in Max Financial Services; Use Bull call spread for upside

Derivatives Data:

Option chain analysis of the stock for the June series shows that the counter is positioned between the first and second highest OI strike prices, which are at 620 and 600 strike call options. Mantri believes that this is most likely to witness short covering if there is a significant gap up in the price. “The recent price action is followed by good volumes even in the derivatives front, indicating that the underlying strength is expected to remain in the short-term trade. The counter has also added significant OI interest in the past few sessions, indicating that the upward move is likely to continue in the near term and the price is expected to test Rs 640-645 levels,” he added.

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