F&O strategy: Nandish Shah recommends the Bear Spread strategy on DLF

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HDFC Securities technical analyst recommends to buy DLF June 300 Put and simultaneously sell 280 Put.

Topics
Derivatives Strategy | F&O Strategies | LDF


Nandish Shah |
Bombay





Bear Spread Strategy on DLF

Buy DLF (expires June 30) 300 PUT at Rs 9.7 and simultaneously sell 280 PUT at Rs 3.70

Lot size 1650

Strategy cost Rs 6 (Rs 9,900 per strategy)

Maximum profit Rs 23,100 if DLF closes at or below 280 at June 30 expiry

Breakeven point Rs 294


Rationale:

  • We saw a short build in DLF futures where we saw a 4% add (Prov) with a 4% DLF drop.
  • The DLF’s short-term trend is negative as it is trading below its 5- and 20-day EMA.
  • The stock price closed below its multiple support range of 306-315 levels
  • Momentum indicators and oscillators like RSI and MFI are trending lower and placed below 40 on the weekly chart, indicating the strength of the current downtrend.


Disclaimer: Nandish Shah is a Technical Research Analyst at HDFC Securities. He holds no position in the stock. Views are personal.


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First published: Fri 17 Jun 2022. 07:42 IST

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