F&O Strategy: HDFC Sec suggests Bear Spread on Interglobe Aviation shares

BEAR SPREAD Strategy on INDIGO

Buy INDIGO (29-MAY Expiry) 5000 PUT at ₹200 & simultaneously sell 4800 PUT at ₹ 123

Lot Size 150

 

Cost of strategy ₹77 (₹11,550 per strategy)

 

Maximum profit ₹18,450 If Indigo closes at or below ₹4800 on 29 may expiry.

 

Breakeven Point ₹4,923

 

Risk Reward Ratio 1: 1.6

 

Approx margin required ₹27,000  Stocks to Watch today, May 9: Britannia, Swiggy, Titan, Kalyan Jewellers

 

Rationale:

 >> Short build up is seen in the Indigo Futures, where we have seen 6 per cent rise in open interest with price falling by 4 per cent. 

>> Short term trend of the stock turned weak, as stock price IS placed below its 5,11 and 20 day EMA.

 

>> Stock price has formed multiple top around 5650 levels 

>> Momentum Oscillato₹like RSI and MFI is in falling mode and placed below 50 on the daily chart, indicating strength in the current downtrend.   

Note : It is advisable to book profit in the strategy when ROI exceeds 20 per cent. 

 

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