Here’s a derivative strategy for Canara Bank by HDFC Securities

Here’s a derivative strategy for Canara Bank by HDFC Securities
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Bull spread Strategy on CANARA BANK


Buy 150 CALL at Rs 7 and simultaneously sell 160 CALL at Rs 3.50


Lot Size: 5400


Cost of the strategy: Rs 3.5 (Rs 18,900 per strategy)


Maximum profit: Rs 35,100 if closes at or above Rs 160 on the August 26 expiry


Breakeven Point: Rs 153.5


Rationale:


We have seen long build up in the Futures, with 23% (Prov) rise in the Open Interest accompanied by a price rise of 4.88%.


Short term trend of the stock turned positive as it closed above its 5, 20- and 50-day EMA


The stock price has broken out on the daily line chart with higher volumes to close at its highest level since July 16, 2021


RSI Oscillators is placed above 50 and slopping upwards, Indicating strength in the current uptrend




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Disclaimer: Nandish Shah is a Technical Analyst with Views expressed are his own.


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