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Derivative Strategy: BULL SPREAD on Indian Oil Corporation (IOCL)
Buy IOC (29-August Expiry) 180 CALL at Rs 6.35 & simultaneously sell 190 CALL at Rs 3.15
Lot Size: 4,875
Cost of the strategy: Rs 3.2 (Rs 15,600 per strategy)
Maximum profit: Rs 33,150 If IOC closes at or above Rs 190 on August 29 expiry.
Breakeven Point: Rs 183.2
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Risk Reward Ratio: 1:2.12
Approx margin required: Rs 30,000
Rationale:
>> Long rollover is seen in the IOC Futures, where we have seen 28 per cent (Prov) rise in Open interest with price rising by 4.78 per cent.
>> The stock price has broken out on the daily chart to close at highest level since February 2024 with a sharp rise in volumes.
>> Primary trend of the stock is positive as stock price is placed above its important short-term and long-term moving averages.
>> Momentum Indicators and Oscillators are showing strength in the current uptrend of the stock.
Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent.=
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Disclaimer: Nandish Shah is a technical research analyst at HDFC Securities. He or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also the Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1 per cent or more in the subject company at the end of the month immediately preceding the date of publication of the tech call. Views expressed are his own.
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Disclaimer: Nandish Shah is a technical research analyst at HDFC Securities. He or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also the Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1 per cent or more in the subject company at the end of the month immediately preceding the date of publication of the tech call. Views expressed are his own.
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