BULL SPREAD strategy on M&M Finance
Buy M&M Finance (July 28 till expiry) 190 CALL at Rs 5.2 and sell 200 CALL at Rs 2.50 at the same time
Lot size 4000
Strategy Cost Rs 2.7 (Rs 10,800 per strategy)
Max profit Rs 29,200 if M&M Finance closes at or above 200 till 28th July expiry
Break point Rs 192.7
Reasoning:
>> So far we’ve seen a long rally in stock futures in the July series, where we’ve seen a 12% increase in open interest with an 8% increase in price.
>> The stock price has broken out on the daily chart from the downtrend line, which is located near the highs of 09 November 2021 and 04 May 2022.
>> The stock price has formed a bullish higher lower top higher candle top on the daily chart.
>> Oscillators like RSI and MFI are in bullish mode and are set above 60, indicating strength in the current uptrend.
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Disclaimer: Nandish Shah is a Senior Derivatives and Technical Analyst at HDFC Securities. Views are personal.
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