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Published on 20/10/2020 12:16:16 PM | Source: ICICI Direct

Derivatives Strategy – Covered Call Buy DLF Ltd For Target Of Rs. 175 - ICICI Direct

Posted in Broking Firm Views - Short Term Report| #DLF Ltd #Real Estate Sector #Trading Report #ICICI Direct

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Rationale

* As the Nifty managed to move towards 12000 level, most beaten down sectors like BFI and metals saw a sharp reversal last week. Stocks from the infra and cement universe are doing well. We feel a catch-up rally could be seen in realty stocks like DLF

* In the current leg of the consolidation, the stock saw a pick-up in long positions. At the same time, it managed to sustain above its sizeable Call base of | 160 where writing OI was seen. We feel this could be a positive trigger for the stock, which will push it higher

* Closure was seen in sizeable Call base of 160 and the OI moved to 175 and 180 strike Calls, which should be potential targets. Put writers of 155 strike are likely to provide cushion in case of reversal from higher levels

* The IV-spread of DLF-Nifty reverted from its Mean+2 sigma levels last month on the back of OTM Call writing and moved towards mean. For a few weeks the stock is attracting buying from its mean levels. We feel a fresh move towards | 175 could be seen in the coming days

 

Buy DLF Ltd @ 162-164  TGT 175 SL 152.5

 

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