The outlook for the stock of Dixon Technologies (₹17,954.40) remains positive. Immediate support levels are at ₹16,886 and ₹15,724. As long as the stock rules above ₹14,000 the long-term outlook will remain positive.

If the current trend sustains, the stock has the potential to reach ₹19,000. We expect the stock to sustain the current upward momentum in the near term.

F&O pointers: Dixon Technologies futures has been witnessing a steady build-up of open interest. It increased from 98,000 contracts on November 13 to 17.22 lakh contracts now along with a sharp surge in price. Option trading signals that the stock could move in the ₹16,500-19,000 range.

Strategy: Consider buying 18,250-call on Dixon Technologies. As the option closed at a premium of ₹278.10 and that the market lot is 50 shares, this strategy would cost ₹13,905. This would be the maximum loss in this trade, and this would happen if the stock failed to cross ₹18,250 on expiry. The break-even point is ₹18,528.10.

Hold the position with an initial stop-loss of ₹175. Shift this to ₹235, if the stock opens on a positive note this week. The stop-loss can be moved up further to ₹275 if the premium gets past ₹300. Traders can aim for a target of ₹325.

Follow-up: The stock of Kalyan Jewellers jumped almost immediately last Monday providing only little chance for traders to enter the strategy.

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