Bull Spread Strategy for ICICI Bank by Nandish Shah of HDFC Securities

Bull Spread strategy on ICICI BANK

Buy ICICI BANK February 550 Call at Rs 7.90 & simultaneously sell 570 call at Rs 2.90

Lot Size: 1375
 

Cost of the strategy Rs 5 (Rs 6875 per strategy)
 

Maximum profit Rs 20625 If ICICI Bank closes at or above 570 on February expiry.
 

Break even Point Rs 555

        

Rationale:

• Long build up is seen in the ICICI Bank Futures’ during this week where we have seen rise in the Open Interest with price moving up by 7%.
   
• The stock price has given breakout on the daily chart by trading above the downward sloping trendline resistance.
   
• Primary trend of the stock is positive where stock price is trading above its all important moving averages.
   
• Oscillators and Momentum Indicators like RSI and MACD have turned bullish on the daily charts.

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Disclaimer: Nandish Shah is a Technical Analyst at HDFC securities.