Bull Spread Strategy on Vedanta
Buy Vedanta (24-Nov Expiry) 310 Call at Rs 8.5 & simultaneously sell 330 Call at Rs 3
Lot Size 1,550
Cost of the strategy Rs 5.5 (Rs 8,525 per strategy)
Maximum profit Rs 22,475; if Vedanta closes at or above 330 on expiry.
Breakeven Point Rs 315.5
Approx margin required Rs 25,000
Rationale:
We have seen long build up in the Vedanta futures on Thursday, where we have seen 17 per cent addition (Prov) in Open Interest with price rising by 2 per cent.
The stock price has broken out on the daily chart where it closed at highest level since 15-Sept 2022.
Primary trend of the Stock turned positive as stock price closed above its 200-day EMA.
Momentum Oscillators like RSI (11) and MFI(10) are in rising mode and placed above 60 on the daily chart, indicating strength in the current uptrend.
Disclaimer: Nandish Shah is Sr. Derivatives & Technical Research Analyst at HDFC Securities. He doesn’t hold any position in the stock. Views are personal.
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