HDFC Securities recommends Bull Spread strategy on ACC for May series

The derivative analyst from HDFC Securities recommends to Buy ACC 1,800 CALL at Rs 45.5 & simultaneously sell 1860 CALL at Rs 22.5

Derivative Strategy

BULL SPREAD Strategy on ACC

Buy ACC (25-MAY Expiry) 1,800 CALL at Rs 45.5 & simultaneously sell 1860 CALL at Rs 22.5

Lot Size: 250

Cost of the strategy: Rs 23 (Rs 5750 per strategy)

Maximum profit Rs 9,250 if ACC closes at or above 1,860 on 25 May expiry.

Breakeven Point: Rs 1823

Approx margin required: Rs 15600

Rationale

>> Long build up seen in ACC Future, up 10 per cent addition in Open Interest (Prov) with price rising by 2 per cent

>> The stock price has broken out on the daily chart with higher volumes where it closes at highest level since 10 March 2023

>> Oscillators and momentum indicators are showing strength in the current uptrend

>> Cement stocks are placed well on the short term chart
 

 

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

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