Analyst suggests bull call spread on CONCOR for Dec 30 expiry, here's why

Strategy on CONCOR by Nandish Shah of HDFC Securities

Buy CONCOR (30-Dec Expiry) 520 CALL at ₹8.2and simultaneously sell 530 CALL at ₹4.9

• Lot size: 1,250
• Cost of the strategy: ₹3.3 (₹4,125 per strategy)
• Maximum profit: ₹8,375 If CONCOR closes at or above 530 on 30 Dec expiry.
• Breakeven Point: ₹524
• Risk Reward Ratio: 1: 2.03
• Approx margin required: ₹5,6000

Rationale:

• Short covering is seen in the CONCOR Futures, where we have seen a fall in OI with price rising by 1 per cent.
• The short-term trend of the stock turned positive as it crossed its 5-day EMA.
• Amongst the Options, put writing is seen at the 520 level.
• Momentum Indicators and Oscillators are showing strength in the current recovery.

 

(Disclaimer: This article is by Nandish Shah, senior technical/derivative analyst at HDFC Securities. Views expressed are his own.)