Derivative strategy on Tech Mahindra by Motilal Oswal Securities

Derivative Strategy on Tech Mahindra by Chandan Taparia, Derivatives & Technical Analyst, Motilal Oswal Securities:

 

TECH MAHINDRA : BULL CALL SPREAD

View: Positive to range bound

BUY 1 LOT OF 640 CALL

SELL 1 LOT OF 660 CALL

NET PREMIUM PAID: 8.20 POINTS

KEEP SPREAD SL:  4.20 POINTS (RISK OF Rs. 4800/-)

KEEP SPREAD TARGET: 15 POINTS (REWARD OF Rs. 8160/-)              

 

RATIONALE:

 

1. It has been respecting to its multiple support of 603-605 zones

2. Volume surge, positive price pattern and strong closing

3. Rising call activity suggests momentum

4. Thus, suggesting bull call spread to get the benefit of positive to range bound move

 

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.