F&O Strategy: Nandish Shah recommends Bear Spread strategy on DLF

The technical analyst from HDFC Securities recommends buying DLF June 300 Put and simultaneously selling 280 Put.

Bear Spread strategy on DLF

Buy DLF (30-June Expiry) 300 PUT at Rs 9.7 & simultaneously sell 280 PUT at Rs 3.70

Lot Size 1650

Cost of the strategy Rs 6 (Rs 9,900 per strategy)

Maximum profit Rs 23,100 if DLF closes at or below 280 on 30 June expiry

Breakeven Point Rs 294

Rationales:

• We have seen short buildup in the DLF futures where we have seen 4% addition (Prov) with DLF falling by 4%.
   
• Short term trend of the DLF is negative as it is trading below its 5 and 20 day EMA. 
   
• Stock price has closed below its multiple support range of 306-315 levels
   
• Momentum Indicators and Oscillators like RSI and MFI is sloping downwards and placed below 40 on the weekly chart, Indicating strength in the current downtrend.

Disclaimer: Nandish Shah is Technical Research Analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.