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

The derivative analyst from HDFC Securities recommends buying IDFC March 65 CALL and simultaneously selling 70 CALL.

Bull spread Strategy on IDFC LTD

Buy IDFC MARCH 65 CALL at Rs 1.80 & simultaneously sell 70 CALL at Rs 0.60

Lot Size 10,000

Cost of the strategy Rs 1.20 (Rs 12,000 per strategy)

Maximum profit Rs 38,000 If IDFC Ltd closes at or above 70 on 31 March expiry.

Breakeven Point Rs 66.20

Rationales:

• We have seen long build up in the IDFC future where we have seen 10 per cent addition(Prov) in Open Interest with price rising by 6 per cent.
• Stock price has broken out from the downward sloping trendline, adjoining the highs of 01-Feb and 21-March 2022.
• Momentum Oscillators like RSI and MFI are placed above 50 and sloping upwards on the daily chart, Indicating strength in the current uptrend.
• Plus DI is trading above minus DI while ADX line is placed above 25, Indicating momentum 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.