Bull spread strategy on Cholamandalam Finance by HDFC Securities

Stock price has broken out from the downward slopping trendline on the daily chart by adjoining the highs of April 30 and May 7, 2021

Buy CHOLA FIN MAY 670 CALL at Rs 17.5 and simultaneously sell 700

CALL at Rs 7.10

Lot Size: 1,250

Cost of the strategy: Rs 10.4 (Rs 13,000 per strategy)

Maximum profit: Rs 24,500 If Chola Fin closes at or above 700 on May 27 expiry

Breakeven Point: Rs 680.4

Rationale:

-- We have seen aggressive long build up in the Chola Fin Futures where we have seen 35 per cent (Prov) rise in the Open Interest with price rising by 5 per cent.
 

-- Stock price has broken out from the downward slopping trendline on the daily chart by