Bajaj Finance Ltd stock has given an upward sloping trendline breakdown on a daily scale. Along with this breakdown, the stock has slipped below its short and long-term moving averages. These averages are in falling mode, which is a bearish sign.
The momentum indicators and oscillators also support the overall bearish chart structure. According to Sudeep Shah, DVP and Head of technical and derivative research at SBI Securities, "The daily RSI has given a bearish crossover, and it is about to cross the 40 mark."
Shah recommended taking a bear spread strategy on Bajaj Finance stock to capture this momentum.
Spread Recommended:
BAJFINANCE Spread Trade: (Bear Spread - 27th June Expiry)
Buy 6700 PE @ cmp Rs 240
Sell 6600 PE @ cmp Rs 197
Net Outflow (Max Risk): 43 points
Date of Initiation: 30th May
Date of Expiry: 27th June
Maximum Potential Risk: 43 points (Rs 5375 Per Pair)
Maximum Potential Gain: 57 points (Rs 7125)
Profitable Zone: Below 6657
Margin Required: Approx Rs 60,300
Derivative Setup
The derivative data aligns with the prevailing bearish chart structure. On the options front, in the June series, there is a notable concentration of call open interest at the 6800 strike, with significant additions of open interest on the put side observed at the 6500 strike. Shah mentioned, "From 6500 to 7000 CE strikes, we have either witnessed call writing, while on the put side, from 6500 to 7000 strike, there has been put buying or short covering."
This collective data suggests a bearish sentiment in the stock. It is likely to test the level of 6550 in the short term.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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