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F&O Strategy: Nandish Shah recommends a Bull spread on Bandhan Bank

The derivative analyst from HDFC Securities recommends buying Bandhan Bank April 360 Call and simultaneously selling 360 Call.

Topics
Buzzing stocks | derivative strategy | F&O Strategies

Nandish Shah  |  Mumbai 

NSE, national stock exchange, nifty50

Bull spread Strategy on BANDHAN BANK

Buy APRIL 340 CALL at Rs 10.70 & simultaneously sell 360 CALL at Rs 3.70

Lot Size 1,800

Cost of the strategy Rs 7 (Rs 12,600 per strategy)

Maximum profit Rs 23,400 If closes at or above Rs 360 on 28 April expiry.

Breakeven Point Rs 347

Rationale:

  • We have seen long build up in the future where we have seen 2% addition (Prov) in Open Interest with price rising by 5%.
  • Stock price has broken out on the daily chart with higher volumes where it closed at highest level since Oct-2021.
  • Short term trend of the stock is positive as it is trading above its 5 and 20 day EMA.
  • Oscillators like RSI and MFI is placed above 60 and sloping upwards on the daily chart, Indicating strength in the current uptrend.

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

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First Published: Fri, April 22 2022. 07:43 IST
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