 "Here's a Bull Spread Strategy on Manappuram Finance by HDFC Securities")
Bull Spread strategy on Manappuram Finance
Buy Manappuram Fin Sept 160 CALL at Rs 4.75 & simultaneously sell 170 Call at Rs 1.75
Lot Size 6000
Cost of the strategy Rs 3 (Rs 18000 per strategy)
Maximum profit Rs 42000 If Manappuram fin closes at or above 170 till September expiry.
Break-even Point Rs 163
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Rationale:
Long build up is seen in the Manappuram fin Futures’ where we have seen 7% (Prov) rise in the Open Interest with Price closing flat.
After breaking out from the downward slopping trendline on 11th Sept, Stock price is consolidating in the narrow range which is a buying opportunity
Primary trend of the stock is positive where stock price is trading above its 200-day SMA
Oscillators like RSI & MFI are showing strength in the stock
+DI is trading above Minus DI while ADX is placed above 20, indicating strength in the uptrend
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Disclaimer: Nandish Shah is Technical Research Analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.
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