Investment Approach: Purchase Put Options for Bajaj Finserv Stocks
In the ever-evolving world of stock trading, the recent fall below the key support level at ₹1,940 for Bajaj Finserv has raised some concerns. This development, as of August 9, 2025, indicates a potential bearish signal, suggesting a need for cautious or defensive positioning.
A Breach of Support, a Signal for Caution
The breach of the ₹1,940 support may hint at potential downward pressure or further volatility in the stock. Traders are advised to be careful with long positions or to consider protective measures such as stop-loss orders to limit downside risk.
Technical Levels and Volatility
Bajaj Finserv's six-month beta of about 1.47 reflects higher volatility compared to the market. Given the stock's high beta and recent support breakdown, a risk-managed approach focusing on market conditions and technical levels is prudent.
Current Trading Strategy
Given the current trading conditions, the strategy should lean towards:
- Caution on initiating fresh long positions until clear signs of support recovery appear.
- Consider stop-loss or risk mitigation tactics if holding existing longs.
- Watch for further technical confirmation or market trend changes before aggressive trading.
- Utilize leverage and margin facilities judiciously to manage risks due to the stock's high volatility.
This approach aligns with trading best practices for high-beta stocks experiencing critical support breakdowns.
Potential Support and Resistance Levels
The stock's support levels are at ₹1,800 and ₹1,750, while potential resistance levels are at ₹2,000 and ₹2,060. If the stock recovers, it will face a barrier at ₹2,000 where both 21- and 50-day moving averages coincide. Given the current conditions, the chance for a rise above ₹2,000 is less likely.
Option Strategy Recommendations
For traders taking higher risks, the recommended stop-loss for the option strategy is ₹15 when the premium rises to ₹50, and it should be tightened to ₹35. Traders can consider buying the 1900-put option of August expiry for ₹30.15. The market lot of derivative contracts of Bajaj Finserv is 500 shares, making the outflow in this strategy ₹15,075. Profits can be booked at ₹60 for the option strategy.
Current Stock Price and Futures Contract
As of the publication date, the stock price of Bajaj Finserv is currently at ₹1,919.20. If the futures contract slips to ₹1,830, the stop-loss should be tightened to ₹1,860. Traders can opt to short Bajaj Finserv August futures at ₹1,922.40 with an initial stop-loss at ₹1,970.
Risk Warning
Please remember that trading in stocks involves risk. The information provided here is for educational and informational purposes only and should not be considered as financial advice. It is crucial to conduct your own research and consult with a financial advisor before making any trading decisions.
[1] Bajaj Finance Weekly Return: -2.01% (as of August 15, 2025) [2] Bajaj Finserv Six-month Beta: 1.47 [3] Bajaj Finance Associate: Yes [4] Bajaj Finserv High Beta: Yes
- In the stock market analysis, a risk-managed approach focusing on market conditions and technical levels is recommended for Bajaj Finserv due to its high beta and recent support breakdown.
- Traders should consider protective measures such as stop-loss orders or risk mitigation tactics when holding long positions as a potential downward pressure may persist following the breach of the key support level at ₹1,940.
- The current trading strategy for Bajaj Finserv suggests being cautious on initiating fresh long positions, watching for further technical confirmation or market trend changes before aggressive trading, and judiciously managing risks due to the stock's high volatility.
- An option strategy for traders taking higher risks includes buying the 1900-put option of August expiry for ₹30.15 and tightening the stop-loss for the strategy when the premium rises to ₹50, with profits being booked at ₹60.
