Here's a derivative strategy on Mahanagar Gas by HDFC Securities

The stock price has broken out from the downward sloping trendline, adjoining the highs of June 12, 2021, and August 3, 2021, with higher volumes.

​Bull spread Strategy - Buy MGL SEPT 1200 CALL at Rs 27 & simultaneously sell 1240 CALL at Rs 15

Lot Size - 600
 

Cost of the strategy - Rs 12 (Rs 7200 per strategy)
 

Maximum profit - Rs 16800, if MGL closes at or above 1240 on 30 Sept expiry
 

Breakeven Point - Rs 1212

Rationale:​​

- There is a long build-up in the MGL Futures where we have seen a 2 per cent (Prov) rise in the Open Interest with price rising by 3 per cent.

- Stock price has broken out from the downward sloping trendline, adjoining the highs of June 12, 2021, and August 3, 2021, with higher volumes.

- Short term trend of the stock turned positive where the stock price is trading above its 5, 20 and 50 days EMA.

- RSI and MFI Oscillators are placed above 60 and slopping upwards, indicating strength in the current uptrend.

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