F&O stock strategy: How to trade Apollo Hospital, Bharti Airtel

Nifty on Friday fell for the fifth straight session to slip below the 21,900 level as FIIs have created noteworthy short positions in the last couple of sessions.

"The previous closure around 21,800 is likely to be seen as the pitstop for the bears, and if bulls could not barge on there, then we may test the 100 DEMA placed around 21,600 on an immediate basis. On the flipside, a series of resistance could be seen from 22,150-22,200, followed by the 20 DEMA at 22300 zone. The undertone certainly favors the bears now and any rise should be seen as an opportunity to either exit longs or to look for bearish bets in the index," said Sameet Chavan of Angel One.

We spoke to analysts on how one should trade stocks that were in focus in the previous trading sessions based on derivative and technical data:

Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities told this to ETMarkets.

Apollo Hospitals Gives Trendline Breakdown

The stock of Apollo Hospitals has given upward sloping trendline breakdown on daily scale. The trendline was formed by connecting swing lows from December 2023. This breakdown was accompanied by notably higher trading volume, indicating strong selling pressure. Furthermore, the formation of a sizable bearish candle on the breakdown day further reinforces the bearish sentiment surrounding the stock.

Currently, the stock is trading below its 20 and 50-day EMA level. These averages are in falling mode. The rising slope of 100 and 200-day EMA has slowed down significantly, which indicates bearish momentum. The daily RSI is about to slip below 40 mark and it is in falling mode. Moreover, the momentum indicator MACD line has crossed under the signal line, which resulted in the histogram turning negative.

The derivative data aligns with the overall bearish chart structure. The April future has dipped by 4.25% and cumulative open interest of current, next and far series has surged by 10.01%. This indicates overall short build up.

There is a notable concentration of call open interest is at the 6300 strike, followed by 6500 strike. While significant open interest on the put side is observed at the 6000 strike. Talking about option chain, from 6800 to 6000 strikes call have witnessed call writing. While, on the put side, 6200 to 5850 strike have witnessed put. This clearly indicates bearish momentum in stock.


Hence, we recommend selling the stock in the zone of Rs 6080-6040 with the stop loss of Rs 6240 level. On the upside, it is likely to test the level of Rs 5750, followed by Rs 5630 in short-term.

Bharti Airtel’s Trendline Breakout Sparks Optimism

On Thursday, the stock of Bharti Airtel Ltd gave a horizontal trendline breakout. This breakout was accompanied by a noteworthy surge in trading volume, reaching over 3 times of 50-day average volume. Thursday’s total volume of 199.38 lakh far exceeded the last 50-days average volume of 64.99 lakh. Furthermore, the stock exhibited a sizable bullish candle on the breakout day, further reinforcing the strength of this upward movement.

As the stock is trading at all-time high, all the moving averages and momentum-based indicators are suggesting strong bullish momentum in stock. The daily RSI has surged above 60 mark and it is on a rising trajectory.

The derivative data is also supporting the overall bullish chart structure. The future has surged by 4.18 per cent and cumulative open interest of current, next and far series has surged by over 28%. This indicates overall long build up. Examining the option chain, it's notable that there is a concentration of call open interest at the 1300 strike, while considerable open interest on the put side is observed at the 1240 strike. Talking about option chain, from 1400 to 1260 CE strikes are witnessing call buying. While, on the put side, from 1340 to 1190 strike have witnessed put writing. This clearly indicates bullish momentum in stock.

These technical and derivative factors are aligning in favour of bulls. Hence, we recommend to accumulate the stock in the zone of Rs 1270-1260 with the stop loss of 1225. On the upside, it is likely to test the level of Rs 1330, followed by 1360 in short-term.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)