13 May , 2024 By : Debdeep Gupta
BPCL shares have been continuously trading above the major moving averages and have formed good base around 600-610 levels on the lower side. According to Arun Kumar Mantri, Founder Mantri Finmart, the stock has taken support around 20-DMA and is set to test the upper Bollinger band which is pegged around 635-640 levels.
Mantri recommended taking a Bull call strategy on BPCL stock to capture this momentum.
Strategy Recommended:
Position: Buy BPCL May 630 Strike Call option
Entry: 15-15.50
Target: 25-29
Stop loss: 10.50
Holding period: 5-6 trading sessions.
Technical View
BPCL stock price has given a bullish crossover on the short-term moving averages and is on the verge of consolidation breakout on the daily charts. "The Bollinger band (20,2) is facing in the northward direction and the stock price is expected to roll on the upper band of the same in the coming days. The support for the stock is around 605-608 on the lower side with resistance at the 635 mark", highlighted Mantri.
Derivative Setup
The option chain analysis of the stock for the May series shows the highest call writing is seen in the 620 CE where more than 24.1 lakh shares are written. On the flip side, the highest writing is seen in the 600 PE where more than 18 lakhs OI is built.
"Any breach of 620 on the spot levels may trigger short covering in the counter which may take the stock price towards 630-635 levels in the short-term time frame. Short-term traders may look upon at-the-money ATM CE of 630 CE of the current month of May series keeping the bullish view on the stock", said Mantri.
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