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F&O Strategy: Analyst suggests Bear Spread for Hindustan Aeronautics stock
Nandish Shah Mumbai
Derivative Strategy
Bear Spread Strategy on Hindustan Aeronautics
Buy HAL (31-July Expiry) 4,800 Put at ₹112 and simultaneously sell 4,600 Put at ₹38
Lot Size: 150
Cost of the strategy: ₹74 (₹11,100 per strategy)
Maximum profit Rs 18900 If HAL closes at or below 4600 on 31 July expiry.
Breakeven Point: ₹4,726
Risk Reward Ratio: 1:1.70
Approx margin required: ₹25,000
Rationale:
Short build up is seen in the HAL Futures where OI rose by 6 per cent with price falling by 2 per cent.
Short term trend turned weak as it is placed below its 5, 11 and 20 day EMA
Stock price has broken down on the daily chart with higher volumes.
Momenutm Indicators and Oscillators are showing weakness in the stock.
Bull Spread Strategy on LIC Housing Finance
Buy LIC HOUSING (31-July Expiry) 640 Call at ₹12.3 and simultaneously sell 660 Call at ₹5.3
Lot Size: 1,000
Cost of strategy: ₹7 (₹7,000 per strategy)
Maximum profit: ₹13,000 if LIC HOUSING closes at or above ₹660 on 31 July expiry.
Breakeven Point: ₹647
Risk Reward Ratio: 1:1.86
Approx margin required: ₹33,500
Rationale:
Long build up is seen in the LIC Housing Futures during the July series till now, where we have seen 9 per cent rise in open interest with price rising by 2.60 per cent.
Short term trend remains positive, as the stock price is placed above its 5,11 and 20 day EMA.
Primary trend is positive as the stock price is placed above its 100 and 200 day EMA.
Oscillators like RSI and MFI are in rising mode and placed above 60 on the daily chart, indicating strength in the current uptrend.
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