F&O Strategy: Nandish Shah recommends a Bull Spread on Balrampur Chini

The derivative analyst from HDFC Securities recommends buying Balrampur Chini April 520 CALL and simultaneously selling 520 CALL.

Bull spread Strategy on BALRAMPUR CHINI

Buy BALRAMPUR CHINI APRIL 500 CALL at Rs 25 & simultaneously sell 520 CALL at Rs 17

Lot Size 1,600

Cost of the strategy Rs 8 (Rs 12,800 per strategy)

Maximum profit Rs 19,200 if Balarampur Chini closes at or above Rs 520 on 28 April expiry.

Breakeven Point Rs 508

Rationales:

• We have seen long build up in the Balarampur Chini future where we have seen 12% addition (Prov) in Open Interest with price rising by 1.70%.
   
• Stock price is forming bullish higher top higher bottom formation on the daily cand weekly charts.
   
• Momentum Oscillators like RSI and MFI is placed above 60 and sloping upwards on the weekly chart, Indicating strength in the current uptrend.
   
• Sugar stock is looking good on the short to medium term chart. 

Disclaimer: Nandish Shah is Technical Research Analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.