24 May , 2024 By : Debdeep Gupta
Reliance Industries Ltd's shares have given a reversal breakout after correction in falling channel. On May 24, Reliance's shares gained over 0.29 percent to trade above Rs 2,963.55.
"The stock seems to have completed the correction in the falling channel," said Jay Thakkar, Head of Derivatives and Quant Research at ICICI Securities.
He recommends taking a bull call spread strategy on Reliance scrip to capture this momentum.
"Since next week is the monthly expiry week, so one can buy 1 lot of 2980 CE at 23.5 and sell 1 lot of 3060 CE at 5.55, hence the total outflow will be of 18 points, which is the maximum risk whereas the maximum gain will be of 62 points, so the risk: reward ratio is more than 1:3," he said.
Strategy Recommended:
Reliance Spread Trade: (Bull Call Spread: May 30 Expiry)
Buy 2980 CE at Rs 23.5 and Sell 3060 CE at Rs 5.5
Total Outflow (Max Risk): 18 points maximum Potential Gain: 62 points
Risk reward ratio: 1:3
Also read: F&O Manual | Nifty soars to a new all-time high; breather expected before uptrend towards 23,500
Technical View:
"The daily momentum indicator MACD has also returned to buy mode, which is a positive sign in the short term. The stock faces a minor hurdle around the 3000 level, which, once surpassed, could take it to 3,100 levels. On the lower side, the stock has immediate support in the 2,850-2,900 range," said Thakkar.
0 Comment