Nifty Bank derivative strategy: Check these key levels before investing

RSI Oscillator is sloping upwards and placed above 60 on the daily and weekly chart, suggesting strength in the current up move, says HDFC Securities

BULL SPREAD Strategy on BANK NIFTY

Buy BANK NIFTY (10-July Expiry) 53000 CALL at Rs 543 & simultaneously sell 53500 CALL at Rs 343

Lot Size: 15

Cost of the strategy: Rs 200 (Rs 3000 per strategy)

Maximum profit: Rs 4500 if BANK NIFTY closes at or above Rs 53,500 levels on 10 July expiry.

Breakeven Point: Rs 53,200

Risk Reward Ratio: 1: 1.50

Approx margin required: Rs 15800

Investment Rationale:

 Accumulation of long build up is seen in the Bank Nifty Futures, where Open Interest rose by 4% (Provisional) with Bank Nifty future closing at all time high levels.

 Short term trend remains positive as Bank Nifty is placed above its 5,11 and 20 day EMA. 

 Bank nifty has broken out on the weekly and monthly charts.

 RSI Oscillator is sloping upwards and placed above 60 on the daily and weekly chart, suggesting strength in the current up move.

 Amongst the Bank NIFTY options, Put writing is seen at 52000-52500 levels.

Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent.

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Disclosure: 

I, NANDISH SHAH, (MS FINANCE), author and the name subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. SEBI conducted the inspection and based on their observations have issued advise/warning. The said observations have been complied with. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. 

Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. 

Any holding in stock – No 

HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.