F&O Strategy: Buy NTPC Call Option

The outlook for the stock of NTPC (₹330.90) is neutral. Immediate support levels are at ₹311 and ₹287. A close below the latter will change the outlook negative.

Nearest resistance levels are at ₹344 and ₹363. A close above the latter will change the outlook positive for NTPC. We expect the stock to move between ₹300 and ₹370 in the near term.

F&O pointers: NTPC August futures closed at ₹331.60 against the spot price of ₹330.90. The counter witnessed a rollover of nearly 95 per cent, which is higher than the three-month average. Rollovers are largely on the longer side. Option positioning indicates that NTPC could move in the ₹290-370 range.

Strategy: Consider buying 335-call on NTPC as the stock can move towards the upper end of the narrow band from the current level. The option premium is ₹5.25 and the market lot is 1,500 shares. So, the cost of this trade will be ₹7,875. This is the maximum loss and that will happen if NTPC fails to cross ₹335 on expiry. The break-even point is ₹340.25.

Target and stop-loss can be ₹7.50 and ₹2 respectively. Shift the stop-loss to ₹5 when the premium hits ₹5.75. Hold the position for a maximum of two weeks. But if the stock opens either on a strong note or considerably weak on Monday, avoid trading.

Follow-up: Traders can book profits as Asian Paints surged sharply as expected.

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

Published on August 2, 2025