Nandish Shah recommends a Bull spread on TCS for the December series

Short term trend remain bullish as the stock price is trading above its 5 and 20 day EMA.

Bull spread Strategy on TCS

Buy TCS Dec 3660 CALL at Rs 48 and simultaneously sell 3700 CALL at Rs 29

Lot Size 150

Cost of the strategy Rs 19 (Rs 2,850 per strategy)

Maximum profit Rs 3,150 if TCS closes at or above 3700 on 30 Dec expiry.

Breakeven Point Rs 3,679

Rationale:

• We have seen long build up in the TCS Futures, where we have seen 3%(Prov) rise in the Open Interest with price rising by 0.8%.
• Stock price has broken out on the daily chart with higher volumes to close at highest level since October 19. 
• Stock price has broken out from the symmetrical triangle pattern on the daily chart.
• Short term trend remain bullish as stock price is trading above its 5 and 20 day EMA.
• RSI and MFI Oscillators are placed above 60 and sloping upwards, Indicating strength in the current uptrend.

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