June F&O series: Analyst suggests Bull Spread for Bandhan Bank stock

F&O stocks: Bandhan Bank share price has been forming bullish 'higher top-higher bottom' formation on the daily chart

BULL SPREAD Strategy on BANDHAN BANK

Buy BANDHAN BANK (26-June Expiry) 175 CALL at ₹5.35 & simultaneously sell 180 CALL at ₹3.45

  Lot Size: 2,800 

Cost of strategy: ₹1.9 (₹5,320 per strategy)

  Maximum profit: ₹8,680 if Bandhan Bank closes at or above ₹180 on 26 June expiry.

  Breakeven Point: ₹176.9 

Risk Reward Ratio: 1: 1.63 

  Approx margin required: ₹25,000  FOLLOW STOCK MARKET LIVE UPDATES TODAY 

 

Rationale:

 

>> Long build up is seen in Bandhan Bank Futures, where we have seen 17 per cent rise in open interest with Bandhan Bank share price rising 1 per cent on Thursday, May 29.

 

>> Bandhan Bank stock price has been forming bullish 'higher top-higher bottom' formation on the daily chart. 

>> RSI oscillator is in rising mode and placed above 60 on the daily chart, indicating strength in the current uptrend. 

 

Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent.    =================  Disclaimer: This article is by Nandish Shah, senior technical/derivative analyst at HDFC Securities. Views expressed are his own.