Option Strategy on Bank of Baroda by Motilal Oswal Securities

Short covering followed by fresh long suggests a bounce back move on the stock

Strategy:

Option Strategy:

BANK OF BARODA : BULL CALL SPREAD

Buy 165 CE 1 lot

Sell 170 CE 1 lot

Reward : 11200                     Risk : 6300

Rationale:
 

1. It has given reversal on weekly chart by forming a Hammer candle

2. Short covering followed by fresh long suggests a bounce back move

3. Fresh Put writing at 160 strike could provide the support

4. Call unwinding in 165 and 170 strike propel for an up move

5. Thus low risk strategy Bull Call Spread is recommended

Disclaimer: Chandan Taparia is a Derivatives and Technical Analyst at Motilal Oswal Securities.

The analyst may have positions in any or all the stocks mentioned above.