Logo


Here's a Bull Spread Strategy on HPCL by Nandish Shah of HDFC Securities

Short term trend of HPCL stock has turned positive where it is trading above its 5 and 20-day EMA

Bullish engulfing pattern is formed with higher volumes on the daily chart
Bullish engulfing pattern is formed with higher volumes on the daily chart

Bull spread Strategy on HPCL

Buy HPCL 180 Call at Rs 11.80 & simultaneously sell 200 Call at Rs 4.8

Lot Size 2700. 

Cost of the strategy Rs 7 (Rs 18900 per strategy)

Maximum profit Rs 35100 If HPCL closes at or above 200 till 26 November expiry.

Breakeven Point Rs 187

Rationale:
 
Long build up is seen in the HPCL Futures' where we have seen 23 per cent rise in the Open Interest (Prov) with HPCL rising by 5 per cent.

Bullish engulfing pattern is formed with higher volumes on the daily chart.

Short term trend of the stock has turned positive where it is trading above its 5 and 20-day EMA.

RSI Oscillator has formed positive divergence Indicating probable trend reversal.

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