Bull Spread strategy on Tata Consumer by Nandish Shah of HDFC Securities

Bull Spread strategy on Tata Consumer Products

Buy TATA CONSUMER PRODUCTS 350 Call at Rs 13.3 & simultaneously sell 370 call at Rs 6.3

Lot Size: 2,700

Cost of the strategy: Rs 7 (Rs 18,900 per strategy)

Maximum profit: Rs 35,100 If Tata consumer closes at or above 357 on May expiry)

Break-even point: Rs 357

Rationale:

-- Long build-up is seen in the Tata consumer Futures’ where we have seen 8 per cent (Prov) rise in the Open Interest with price moving up by 1.7 per cent.

-- Primary trend of the stock is positive where stock price is trading above its 200-day SMA

-- Stock price is taking support at 20-day EMA since last two days

-- RSI Oscillators is placed around 60 while MACD is trading above the central line Indicating bullish set ups