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Derivative strategy on NBCC by HDFC Securities

Derivative strategy by Nandish Shah, Senior Technical & Derivative Analyst, HDFC Securities.

Nandish Shah  |  Mumbai 

Trading
Trading

Bear Spread strategy on NBCC

Buy July 52 Put at Rs 1.40 & simultaneously sell 49 Put at Rs 0.40.

Lot Size: 8500

Cost of the strategy Rs 1 (Rs 8500 per strategy)

Maximum profit: Rs 17,000 if closes at or below 48 on July expiry

Breakeven Point: Rs 51

Rationale:

-- Short build up is seen in the Futures’ yesterday, where we have seen sharp rise in Open Interest with price falling by 3.8 per cent.

-- Stock price has broken down from the upward slopping trendline, adjoining the low of 14-Feb-2019, 16-May-2019 and 08-July 2019.

-- Stock price is trading below its 5, 20 and 200 day SMA Indicating weakness in the stock.

-- Oscillators and Momentum Indicators like RSI and MACD showing weakness in the stock on the daily and weekly charts.

First Published: Fri, July 19 2019. 07:36 IST
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