Option strategy of the day | BEL shares see long position additions; Buy 230 CE for upside

On May 15 around 10 am, BEL shares were up over 0.30 percent, surpassing Rs 231.

BEL Ltd shares have found support at the 50 EMA, with technical and derivative parameters suggesting a potential upward move towards Rs 238-240. On May 15, BEL shares were up over 0.30 percent, surpassing Rs 231.

The stock is currently trading above its short moving averages. Avani Bhatt, Senior Vice President of Derivative Research at JM Financial, noted that the stock has completely recovered the losses of the last two days and closed positively in yesterday's trading session.

Bhatt recommended adopting a long call strategy on BEL stock to capture this momentum.

Recommended Strategy:
Bharat Electronics: (Long Call: 30th May Expiry)
Buy 235 CE at Rs 7

Target: Rs 11

Stop Loss: Rs 5.25

Technical View:

"The stock found support at the 50 EMA and reversed to close above the short-term moving averages congestion zone around 229 on daily charts. It has completely recovered the losses of the last 2 days and closed on a positive note," highlighted Bhatt.

Derivative Setup:

On the options front, in the May series, there is significant call open interest concentration at Rs 230, 235, and 240 strikes, with substantial additions of open interest observed on the put side at the Rs 230 strike. "May futures witnessed long additions to the tune of 1.5 percent. Options data suggests buying interest picking up at 230, 235, and 240 calls, while on the puts side, the support base is gradually firming up at the 230 level with open interest additions at 230 PE on the writing side. Technical and derivative parameters indicate a potential upward move towards 238-240," said Bhatt.

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