Published on 17/09/2020 1:58:08 PM | Source: ICICI Direct

Derivatives Strategy – Covered Call Buy Voltas For Target Of Rs. 721 - ICICI Direct

Posted in Broking Firm Views - Short Term Report| #Voltas Ltd. #Trading Report #ICICI Direct #Consumer Durables Sector

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Derivatives Strategy – Covered Call

* Consumption theme remained in focus as the Nifty reverted from 11300 levels where leaders like Voltas outperformed among the pack

* On the back of expected pick-up in demand ahead of the festive season, Voltas moved sharply from | 650 levels along with delivery pick-up

* From a broader prospective, the stock saw short covering since May 2020 where the OI closed almost 38%. However, as the new series started, Voltas started the month with relatively lower OI base and saw accumulation of positions at lower levels

* Sizeable Call OI base for the stock is placed at | 700. However, no major OI additions were seen in the 700 Call despite a sharp move from | 670 levels indicating no major Call writing

* We feel the stock is well placed to move above | 700 levels on the back of fresh accumulation. Hence, we recommend forming a Covered Call strategy

Covered Call: Buy Voltas September future at Rs. 684-689 & Sell 710 Call at Rs. 9-11, Target: Rs. 721, Stop loss: Rs. 655.5, Time frame: Till September expiry


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