 "Nandish Shah recommends a Bull spread strategy on Chambal Fertilisers")
Bull spread strategy on CHAMBAL FERT
Buy CHAMBAL FERT March 400 CALL at Rs 13.50 & simultaneously sell 420 CALL at Rs 7.50
Lot Size: 1,500
Cost of the strategy: Rs 6 (Rs 9,000 per strategy)
Maximum Profit: Rs 21,000 If Chambal Fert closes at or above 420 on 31 March expiry.
Breakeven Point: Rs 406
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Rationale:
- We have seen long build up in the future segment where we have seen 2% addition (Prov) in Open Interest with price rising by 0.7%.
- Primary trend is bullish as stock price is trading above its 200 day EMA.
- Short term trend of the stock turned bullish as stock price is placed above its 5 and 20 day EMA.
- Oscillators like RSI and MFI is placed above 50 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.
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