Nandish Shah recommends the following option strategy on SBI Cards

The derivative analyst from HDFC Securities recommends buying November 1020 strike Put based on the following four rationales

Option Strategy on SBI CARDS

Buy SBI CARDS Nov 1020 PUT AT RS 7

Lot Size 500

STOP LOSS RS 3

TARGET RS 15

Rationales:

1. We have seen short build up in the SBI Cards Futures, where we have seen 21%(Prov) rise in the Open Interest with price falling by 3%.
   

 

Stock price has broken out from the upward sloping trendline, adjoining the lows of 22-July and 29-Oct on the daily chart.

 

RSI and MFI Oscillators are placed below 40 and sloping downwards, Indicating strength in the current downtrend.

 

Minus DI is trading above Plus DI while ADX line is placed above 25, Indicating momentum in the current downtrend.

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