F&O Strategy: Analyst suggests Bear Spread for Hindustan Aeronautics stock
F&O strategy: Short-term trend of the Hindustan Aeronautics turned weak, while it is positive for LIC Housing Finance
 "F&O Strategy: Analyst suggests Bear Spread for Hindustan Aeronautics stock")
Derivative Strategy
Bear Spread Strategy on Hindustan Aeronautics
Buy HAL (31-July Expiry) 4,800 Put at ₹112 and simultaneously sell 4,600 Put at ₹38
- Lot Size: 150
- Cost of the strategy: ₹74 (₹11,100 per strategy)
- Maximum profit Rs 18900 If HAL closes at or below 4600 on 31 July expiry.
- Breakeven Point: ₹4,726
- Risk Reward Ratio: 1:1.70
- Approx margin required: ₹25,000
Rationale:
- Short build up is seen in the HAL Futures where OI rose by 6 per cent with price falling by 2 per cent.
- Short term trend turned weak as it is placed below its 5, 11 and 20 day EMA
- Stock price has broken down on the daily chart with higher volumes.
- Momenutm Indicators and Oscillators are showing weakness in the stock.
Bull Spread Strategy on LIC Housing Finance
Buy LIC HOUSING (31-July Expiry) 640 Call at ₹12.3 and simultaneously sell 660 Call at ₹5.3
- Lot Size: 1,000
- Cost of strategy: ₹7 (₹7,000 per strategy)
- Maximum profit: ₹13,000 if LIC HOUSING closes at or above ₹660 on 31 July expiry.
- Breakeven Point: ₹647
- Risk Reward Ratio: 1:1.86
- Approx margin required: ₹33,500
Rationale:
- Long build up is seen in the LIC Housing Futures during the July series till now, where we have seen 9 per cent rise in open interest with price rising by 2.60 per cent.
- Short term trend remains positive, as the stock price is placed above its 5,11 and 20 day EMA.
- Primary trend is positive as the stock price is placed above its 100 and 200 day EMA.
- Oscillators like RSI and MFI are in rising mode and placed above 60 on the daily chart, indicating strength in the current uptrend.