Bullish Spread Strategy on Axis Bank by Nandish Shah of HDFC Securities

Bull Spread strategy on AXIS BANK

Buy AXIS BANK JUNE 760 CALL at Rs 25 and simultaneously sell 790 CALL at Rs 14

Lot size: 1200

Cost of the strategy: Rs 11 (Rs 13,200 per strategy)

Maximum benefit: Rs 22,800 if Axis Bank closes at 790 or more when June 24 expires.

Balance point: Rs 771

Reasoning:

>> We have seen a long aggressive rise in Axis Bank futures, where we saw a 22% (Prov) rise in Open Interest with a 2% price rise.

>> The stock price has already broken away from the downtrend line on the daily chart, reaching the highs of February 16 and March 12, 2021.

>> Plus DI is trading above Minus DI while the ADX line is placed above 20, indicating the momentum of the current uptrend.

>> Oscillators such as RSI and MFI are showing strength in the current uptrend.


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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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