F&O Strategy: Nandish Shah recommends a bull lead over IDFC

HDFC Securities derivative analyst recommends buying IDFC March 65 CALL and selling 70 CALL simultaneously.

Threads
buzz stock | IDFC Limited | Market trends


Nandesh Shah |
Mumbai


Bull Spread Strategy on IDFC LTD

Buy IDFC MARCH 65 CALL at Rs 1.80 and SELL 70 CALL at the same time at Rs 0.60



Lot size 10,000

Strategy cost Rs 1.20 (12,000 rupees per strategy)

Maximum profit of Rs 38,000 if IDFC Ltd closes at or above 70 on the expiry date of 31st March.

Break-even point Rs 66.20


Justifications:

  • We’ve seen a long build up in the IDFC future as we’ve seen an addition of 10 percent (Prov) in open interest as the rate goes up 6 percent.
  • The stock price broke out of the downward sloping trend line, bordering the highs of February 01 and March 21, 2022.
  • Momentum indicators such as the RSI and MFI are positioned above the 50 level and are sloping upwards on the daily chart, indicating the strength of the current uptrend.
  • DI is also trading above minus DI while the ADX line is positioned above 25, indicating momentum in the current uptrend.


Disclaimer: Nandish Shah is a Technical Research Analyst at HDFC Securities. He does not hold any position in the stock. Opinions are personal.


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First published: Friday, March 25, 2022. 07:34 IST

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