After making a high at Rs 2,313 in March, the price of TVS Motors share declined to a low of Rs 1,873 on April 19, from where it resumed its recovery.
Since March 14, the stock has been trapped in a range of Rs 2,200 on the upside and around Rs 1,926 on the lower side.
ETMarkets.comHighest outstanding OI (expiry on 30th May)
Highest Call OI- Rs 2,200 (Rs 1,112); RS 2,300 (Rs 1,249)
Highest Put OI- Rs 2,100 (Rs 1,149)
“TVS Motors showcases promising technical indicators, marked by a bullish candle formation on its daily chart from the support levels of Rs 2,090 near to its 20 Day EMA levels currently trading at Rs 2,190,” said Deven Mehata, analyst at Choice Broking.
The stock is performing well above all its significant exponential moving averages and has also formed higher high higher low formation on daily charts indicating strength.
“Maintaining its position above key moving averages and an RSI of 64.83 underscores its positive momentum. Investors may consider initiating positions in TVS Motors, leveraging option strategies to capitalize on potential upside movements,” Mehata added.
Mehata suggests deploying a bull call spread to capture the most out of an anticipated upward movement of the stock.
Bull Call Spread
Bull Call Spread strategy is best implemented when the outlook for a stock is not very aggressive. It is a two-leg spread strategy typically involving an ATM and an OTM option. In this strategy there is always a ‘net debit’ for the trader.
ETMarkets.comBelow is the payoff graph for the strategy:
ETMarkets.com(Source: Choice Broking)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
