Here’s a derivative strategy on Mahanagar Gas by HDFC Securities



Bull spread Strategy– Buy MGL SEPT 1200 CALL at Rs 27 & simultaneously sell 1240 CALL at Rs 15


Lot Size – 600

Cost of the strategy – Rs 12 (Rs 7200 per strategy)


Maximum profit – Rs 16800, if MGL closes at or above 1240 on 30 Sept expiry


Breakeven Point – Rs 1212


Rationale:​​


– There is a long build-up in the MGL Futures where we have seen a 2 per cent (Prov) rise in the Open Interest with price rising by 3 per cent.


– Stock price has broken out from the downward sloping trendline, adjoining the highs of June 12, 2021, and August 3, 2021, with higher volumes.


– Short term trend of the stock turned positive where the stock price is trading above its 5, 20 and 50 days EMA.


– RSI and MFI Oscillators are placed above 60 and slopping upwards, indicating strength in the current uptrend.


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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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