F&O Strategy: Nandish Shah recommends a bull spread on Balrampur Chini


The strategy of spreading the bull on Balrampur, China

BUY BALRAMPUR CHINI APRIL 500 CALL at Rs 25 and SELL 520 CALL at the same time at Rs 17

Lot size 1,600

Strategy cost Rs 8 (Rs 12,800 per strategy)

Maximum profit of Rs 19,200 if Balarampur Chini closes at or above Rs 520 on expiry date of 28th April.

Break-even point 508 rupees


Justifications:

  • We saw a long build up in the Balarampur Chini future as we saw a 12% (Prov) addition in open interest with the price up 1.70%.
  • The stock price is forming a bullish higher and higher low formation on the daily chart of the weekly candles.
  • Momentum indicators such as the RSI and MFI are positioned above the 60 level and are sloping upwards on the weekly chart, indicating the strength of the current uptrend.


  • Sugar stocks are looking good on the short to medium term chart.


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: Fri, 01 April 2022. 07:31 IST

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