F&O Strategy: Nandish Shah recommends a Bull Spread on Tata Consumer


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The stock price has broken out on the daily chart with higher volumes, where it closed at the highest level since November 2021

Topics

Stock calls | Markets | Tata Consumer Products



Nandish Shah  | 
Mumbai 





BULL SPREAD Strategy on TATA CONSUMER


Buy TATA CONSUMER (29-Sept Expiry) 850 CALL at Rs 27 & simultaneously sell 870 CALL at Rs 19


Lot Size: 900


Cost of the strategy: Rs 8 (Rs 7,200 per strategy)


Maximum profit: Rs 10,800 If Tata consumer closes at or above Rs 870 on Sept 29 expiry


Breakeven Point: Rs 858


Approx margin required: Rs 34,000


Rationale:


  • We have seen long build up in the Tata comm futures, where we have seen 12 per cent addition (Prov) in Open Interest with price rising by 4 per cent.

  • The stock price has broken out on the daily chart with higher volumes, where it closed at the highest level since November 2021.

  • Momentum Oscillators like RSI (11) and MFI (10) are in rising mode and are placed above 60 on the daily weekly chart, indicating strength in the current uptrend.

  • Plus DI is trading above minus DI and ADX line has started rising upwards, indicating that the stock price is likely to gather momentum in the current uptrend.


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


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First Published: Fri, September 02 2022. 08:35 IST





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