Nandish Shah recommends a Bull spread strategy on LIC Housing Finance

The derivative analyst from HDFC Securities recommends buying Buy LICHSG FINANCE FEB 410 CALL and simultaneously selling 430 CALL

NSE, Nifty, markets
Photo: Bloomberg
Nandish Shah Mumbai
1 min read Last Updated : Feb 11 2022 | 8:21 AM IST
Bull spread Strategy on LIC HOUSING FINANCE

Buy LICHSG FINANCE FEB 410 CALL at Rs 10.7 & simultaneously sell 430 CALL at Rs 5
Lot Size 2000
Cost of the strategy Rs 5.7 (Rs 11,400 per strategy)
Maximum profit Rs 28,600; If LIC Housing Fin closes at or above 430 on 24 Feb expiry

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Breakeven Point Rs 415.7

Rationales:
  • We have seen long build up in the LIC Housing Finance future where we have seen 2 per cent addition (Prov) in Open Interest with price rising by 2.7 per cent.
     
  • Stock price has broken out on the daily chart from the downward sloping trendline, adjoining the highs of 19-Oct-21 and 03-Feb-2022.
 
  • Primary trend is bullish as stock price is trading above all important short and medium term moving averages.
     
  • Oscillators like RSI and MFI is placed above 60 and sloping upwards on the daily chart, indicating strength in the current uptrend.
  • Disclaimer: Nandish Shah is Technical Research Analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.

    Topics :Buzzing stocksLIC Housing FinanceMarket trendsTrading strategiesDerivatives strategyDerivative tradingStock Picks

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