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Derivative strategy on NBCC by HDFC Securities

Trading
Bear Spread strategy on NBCC

Buy NBCC July 52 Put at Rs 1.40 & simultaneously sell 49 Put at Rs 0.40.

 
Lot Size: 8500

 
Cost of the strategy Rs 1 (Rs 8500 per strategy)

 
Maximum profit: Rs 17,000 if NBCC closes at or below 48 on July expiry

 
Breakeven Point: Rs 51


Rationale:

-- Short build up is seen in the NBCC Futures’ yesterday, where we have  seen  sharp  rise  in Open Interest with price falling by 3.8 per cent.

 
-- Stock price has broken down from the upward slopping trendline, adjoining the low of 14-Feb-2019, 16-May-2019 and 08-July 2019.

 
-- Stock  price  is  trading  below  its  5,  20  and 200 day SMA Indicating weakness in the stock.

 
-- Oscillators  and Momentum Indicators like RSI and MACD showing weakness in the stock on the daily and weekly charts.