The stock of IRCTC (₹787.50) is ruling at a crucial level. Immediate supports are at ₹737 and ₹622. A close below the latter will confirm a negative trend. Nearest resistances are at ₹832 and ₹987. A close above the latter will change the long-term outlook positive.

F&O pointers: IRCTC January and February futures closed at ₹789 and ₹793.10 respectively against the spot price of ₹787.50. The counter witnessed a healthy rollover of 64 per cent. The steady accumulation of open interest indicates long build-up. Option trading indicates a potential trading range of ₹750-900.

Event: Budget presentation on Saturday (February 1).

Strategy: Consider buying the 820-February call (₹23.65) on IRCTC. As the market lot is 875 shares, this trade would cost ₹20,693.75. This would be the maximum loss in this strategy which will happen if IRCTC fails to cross ₹820 on expiry. However, profit potentials are huge if the stock rises sharply. The break-even price would be ₹843.65.

Hold the position for two weeks. Keep initial stop-loss at ₹9. Shift this to ₹23 if IRCTC opens on a positive note. The stop-loss can be raised as the premium goes up. Target can be ₹39. Traders who can take higher risk can aim for a target of ₹50.

With Budget-induced volatility, the high-beta IRCTC is expected to see above average volatility. Risk averse traders can stay away.

Follow-up: Macrotech Developers moved on expected lines last Monday and hit the mentioned target.

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

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