F&O Strategy: Nandish Shah recommends a Bull spread on ICICI Bank

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The technical analyst from HDFC Securities recommends buying ICICI Bank 740 Call and simultaneously selling 760 Call for the June expiry.

Topics

F&O Strategies , Market trends , Market technicals



Nandish Shah ,
Mumbai




BULL SPREAD Strategy on ICICI BANK

Buy (30-June Expiry) 740 CALL at Rs 20.5 & simultaneously sell 760 CALL at Rs 12.5

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Lot Size 1,375

Cost of the strategy Rs 8 (Rs 11,000 per strategy)

Maximum profit Rs 16,500 If closes at or above 760 on 30 June expiry.

Breakeven Point Rs 748


Rationale:

  • We have seen long rollover in the futures where we have seen 22 per cent addition in Open Interest (Prov) with ICICI Bank rising by 2.5 per cent.
  • Short term and medium-term trend of the ICICI Bank turned positive as it is trading above its 20 and 200 day EMA.
  • ICICI Bank June Future has broken out from the downward sloping trendline, adjoining the highs of 19-April and 29-April 2022.
  • Momentum Oscillators like RSI(11) and MFI(10) are sloping upwards and placed near 60, Indicating strength in the current uptrend.


Disclaimer: Nandish Shah is 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, May 27 2022. 07:42 IST





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