 "Indraprastha Gas, IGL")
BULL SPREAD Strategy on IGL
Buy IGL (23-Feb Expiry) 440 CALL at Rs 7 & simultaneously sell 450 CALL at Rs 4
Lot Size: 1,375
Cost of the strategy: Rs 3 (Rs 4,125 per strategy)
Maximum profit Rs 9,675 if IGL closes at or above Rs 450 on 23 February expiry
Breakeven Point: Rs 443
Approx margin required: Rs 21,000
Rationale:
>> We have seen long build up in the IGL Futures during the February series till now, where we have seen 10 per cent addition in Open Interest with price rising by 5 per cent.
>> The stock price has broken out on the daily chart on 08-Feb with higher volumes.
>> The stock price has been taking support at 200 day EMA since January 2023.
>> Momentum Oscillators like RSI (11) and MFI (10) are sloping upwards and placed above 60 on the daily chart, indicating strength in the current uptrend.
>>Plus DI is trading above minus DI, while ADX line has started sloping upward, indicating stock price is likely to gather momentum in the coming days.
Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent.
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Disclaimer: Nandish Shah is senior derivatives & technical research analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.
