F&O Strategy: Nandish Shah recommends a Bull spread on Bandhan Bank

The derivative analyst from HDFC Securities recommends buying Bandhan Bank April 360 Call and simultaneously selling 360 Call.

Bull spread Strategy on BANDHAN BANK

Buy BANDHAN Bank APRIL 340 CALL at Rs 10.70 & simultaneously sell 360 CALL at Rs 3.70

Lot Size 1,800

Cost of the strategy Rs 7 (Rs 12,600 per strategy)

Maximum profit Rs 23,400 If Bandhan Bank closes at or above Rs 360 on 28 April expiry.

Breakeven Point Rs 347

Rationale:

• We have seen long build up in the Bandhan Bank future where we have seen 2% addition (Prov) in Open Interest with price rising by 5%.
   
• Stock price has broken out on the daily chart with higher volumes where it closed at highest level since Oct-2021.
   
• Short term trend of the stock is positive as it is trading above its 5 and 20 day EMA. 
   
• 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.