Derivative strategy on Federal Bank by HDFC Securities

Derivative strategy on Federal Bank by Nandish Shah, Assistant Vice President, PCG, HDFC Securities.

Buy FEDERAL BANK March 85 call option at Rs 3 

Stop loss of Rs 2.10 

Target Rs 5

Rationale:

• Long build-up is seen in the Federal Bank Futures’ where we have seen rise in Open Interest with Federal bank moving up 3%
• Stock price closed above its 20 and 200-day simple moving average (SMA) yesterday, indicating a positive trend for the short to medium term.
• After forming double bottom around 78-odd levels last week, Federal Bank has risen over 7% with higher volumes, indicating a bullish trend reversal.
• Mometum Indicators and Oscillators like RSI and MACD is showing strength in the stock.