The outlook for Ashok Leyland (₹131.20) remains positive. The stock finds immediate support at ₹120 and ₹98. The long-term positive outlook will remain as long as it stays above the latter. We expect the positive trend to continue in the short term.
F&O pointers: Ashok Leyland witnessed a rollover of 41 per cent, which is healthy. Ashok Leyland September futures is at ₹131.64 and August futures is at ₹130.97 against spot price of ₹131.20. Option trading indicates that the price could move in the broad ₹115-145 range.
Strategy: Consider buying September 132.50-strike call, which closed with a premium of ₹4.10. As the market lot is 5,000 shares, this strategy would cost ₹20,500. The maximum loss would be the premium paid (i.e. ₹20,500) and that will happen if Ashok Leyland fails to cross ₹132.50 on expiry. The break-even point would be ₹136.60.
Hold the position with an initial stop-loss at ₹1.50. Shift it to ₹3 if Ashok Leyland opens flat or on a positive note on Monday. Traders can aim for a target of ₹5.50. Hold the position for at least two weeks. If the stock opens sharply higher or lower, traders can stay away from this strategy.
Follow-up: Recommendation on ITC would not have given the recommended entry point given the sharp slide since early last week.
Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.
Published on August 23, 2025
