Derivatives strategy by HDFC Securities: Buy Manappuram Finance Jan Futures

Stock price has broken out on the daily chart by closing above the resistance level of 181.5 to close at all time high with higher volumes

algo trading
Nandish Shah Mumbai
1 min read Last Updated : Jan 17 2020 | 8:17 AM IST
Bull Spread strategy on MANAPPURAM FINANCE

Buy Manappuram Finance January 185 Call at Rs 5.25 & simultaneously sell 200 call at Rs 1.25

Lot Size 6,000

Cost of the strategy Rs 4 (Rs 24,000 per strategy)

Maximum profit Rs 66,000 If Manappuram Finance closes at or above 200 on January expiry.

Break even Point Rs 189

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Rationale:

-- Long build up is seen in the Manappuram Finance Futures’ where we have seen rise in the Open Interest with price moving up by 4%.

-- Stock price has broken out on the daily chart by closing above the resistance level of 181.5 to close at all time high with higher volumes.

-- In the option segment, we have seen 48 per cent addition in 190 strikes Call Option, suggesting Call buying.

-- Oscillator and momentum Indicators like RSI and MACD have been showing strength on the daily and weekly charts.

Topics :Derivative tradingderivative strategyMarketsHDFC SecuritiesManappuram Finance

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