Derivative Strategy on SBI by Motilal Oswal Securities

Derivative Strategy on SBI by Chandan Taparia, Derivatives & Technical Analyst, Motilal Oswal Securities:

STRATEGY:

SBIN : BULL CALL SPREAD
VIEW : POSITIVE TO RANGE BOUND

BUY 1 LOT OF 245 CALL
SELL 1 LOT OF 260 CALL

NET PREMIUM PAID : 5 POINTS
KEEP SPREAD STOP LOSS OF : 2.50 POINTS (Risk of Rs. 7,500/-)
KEEP SPREAD TARGET OF : 10 POINTS (Reward of Rs. 15,000/-)

RATIONALE :

Double bottom pattern with a Hammer candle on weekly scale

Positive divergence on Price and Oscillators, turning from deep oversold territory

Call unwinding and fresh Put writing at 240, 245 and 250 strikes

Expecting a short term bottom led by short covering, thus suggesting Bull Call Spread to play the bounce

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.


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