Axis Bank shares have given a breakout on post Q4 quarterly results last month. On May 10, Axis Bank shares jumped over 1.29 percent to above Rs 1,300.
Recently, the stock has corrected along with the overall markets and in that process, it has retested the breakout levels.
Jay Thakkar, Head of technical and derivative research at ICICI Securities, suggests taking a bull call spread strategy on Axis Bank stock to capture this momentum.
Strategy Recommended:
Axis Bank Spread Trade: (Bull Call Spread: 30th May Expiry)
Buy 1140 CE at Rs 22
Sell 1180 CE at Rs 9
Net Outflow (Max Risk) 13 points
Maximum Potential Gain: 27 points
Risk reward ratio: 1:2
Technical View
"Recently, the stock has corrected along with the overall markets and in that process, it has retested the breakout levels. So, form hereon the stock is very likely to again regain its upward momentum and take off its previous swing high of 1180. This is one of the stocks in the Bank Nifty which is relatively stronger, hence it is likely to outperform," highlighted Thakkar.
Derivative setup
Thakkar also said, "The stock had witnessed short buildup in February and March series, however, it has seen significant short covering in the entire month of April, hence it is likely to see further uptrend as recently the stock has seen some long additions in the May series."
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