The short-term outlook for the stock of Voltas (₹1,663.50) has turned negative. Immediate support levels are at ₹1,582 and ₹1,428. A close below the latter will change even the long-term outlook negative for Voltas.

On the other hand, the nearest resistances are at ₹1,711 and ₹1,766. A close above the latter will reconfirm the long-term bullish trend.

F&O pointers: Voltas Jan futures, at ₹1,668.20 against the spot price of ₹1,663.50, signals the existence of long positions despite a sharp fall on Friday and heavy unwinding in the recent times.

Open positions slipped from 75.83 lakh shares on January 3 to 72.19 lakh shares on January 10. During this time, the price fell from ₹1,829.25 to ₹1,668.20. Option trading indicates a possible trading range of ₹1,500-1,800.

Strategy: Buy 1,660-put on Voltas which closed with a premium of ₹43.15 on Friday. As the market lot is 300 shares per contract, the strategy would cost ₹12,945, which would be the maximum loss. Traders will face maximum loss if Voltas holds above ₹1,660 on expiry. The break-even point is ₹1,616.85. 

Initial stop-loss can be placed at ₹38. Shift stop-loss to ₹43 when the premium rises above ₹47. Book profits at ₹58. If the stock opens sharply lower, traders can stay away from this strategy. We suggest holding the position for at least two weeks.

Follow-up: Contrary to our expectations, Adani Energy Solutions tumbled sharply last week.

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