Technical Analysis

Future Perfect: Bull call spread on M&M Fin

KS BADRI NARAYANAN | Updated on January 18, 2018 Published on July 31, 2016


The outlook for Mahindra & Mahindra Financial Services (₹331) remains positive.

The stock finds immediate support at ₹309. As long as the stock holds above ₹245, the long-term bullish outlook will remain intact. It appears that the stock is heading for ₹434 level, if the current bullish trend sustains.

F&O pointers: On Friday, futures contract shed 7.45 lakh shares in open interest. This indicates that traders preferred to book profits rather than roll over their positions. Option trading indicates a trading range of ₹310 to ₹340.

Strategy: Investors can consider a bull call spread on M&M Financial. This can be initiated by selling ₹350-call and simultaneously buying the ₹330-call. They closed with a premium of ₹6.6 and ₹13.95 respectively.

The maximum loss in this strategy would be the initial payout, which is ₹7.35/contract. Maximum loss occurs if the stock fails to sustain above ₹330 level at the time of expiry.

However, a profit of ₹12.65/contract is possible, if M&M Financial manages to close at or above ₹350.

Traders could consider exiting the positions if the loss mounts to ₹5/contract.

Alternatively, traders with high-risk appetite can consider going long on M&M Financial futures with a stop-loss at ₹309. Market lot is 2,500.

Follow-up: Hold SBI ₹215 August call.

Published on July 31, 2016

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.