Here's a Bull Spread strategy for Tata Chemicals by HDFC Securities

Bull Spread strategy on Tata Chemicals

Buy Tata chem 320 Call at Rs 16.35 & simultaneously sell 340 call at Rs 9.45
 

Lot Size 2000
 

Cost of the strategy Rs 6.9 (Rs 13800 per strategy)
 

Maximum profit Rs 26200 If Tata chem closes at or above 340 on Jul expiry.
 

Breakeven Point Rs 326.9

        

Rationale:

1. Long build up is seen in the Tata chem Futures’ where we have seen 5%(Prov) rise in the Open Interest with price moving up by 1.5 per cent.
    
2. We have seen healthy rollover of 82% to the July series.
    
3. Stock price has broken out on the daily chart where it closes at highest level since 05 June.
    
4. Primary trend of the stock is positive where it is trading above its 200-day SMA.
    
5. RSI Oscillators is placed over 60 level Indicating strength in the uptrend
    

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Disclaimer: Nandish Shah is Technical Research Analyst at HDFC Securities.