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Bull Spread Strategy on Bajaj Finance by Nandish Shah of HDFC Securities

The stock price of Bajaj Finance has broken out on the daily chart by surpassing the resistance level of 5800 with higher volumes

Topics
Stock calls | derivatives trading | Bajaj Finance

Nandish Shah  |  Mumbai 

Bajaj Finance
Bajaj Finance's stock price is forming bullish higher top higher bottom formation on the weekly chart.

Bull spread Strategy on BAJAJ FINANCE

Buy JUNE 6000 CALL at Rs 164 & simultaneously sell 6300 CALL at Rs 70

Lot Size: 125

Cost of the strategy: Rs 94 (Rs 11750 per strategy)

Maximum profit: Rs 25750 If closes at or above 6300 on 24 June expiry.

Breakeven Point: Rs 6094

Rationale:

>> We have seen long build up in the Futures till now during the June series where we have seen a 7 per cent rise in the Open Interest with price rising by 4 per cent.

>> The stock price has broken out on the daily chart by surpassing the resistance level of 5800 with higher volumes.

>> The price is forming bullish higher top higher bottom formation on the weekly chart.

>> Plus DI is trading above Minus DI while ADX line is placed above 25, Indicating momentum in the current uptrend.

>> Oscillators like RSI and MFI is showing strength in the current uptrend.


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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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First Published: Fri, June 04 2021. 08:07 IST
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