BPCL shares have been continuously trading above the major moving averages and have formed a good base around Rs 600-610 on the lower side. On May 13, the BPCL stock was trading at Rs 605, down 2 percent from the previous close.
BPCL stock has taken support around 20-DMA (Daily Moving Average) and is set to test the upper Bollinger band at around Rs 635-640, said Arun Kumar Mantri, Founder Mantri Finmart.
Mantri recommended taking a Bull call strategy on BPCL stock to capture this momentum.
Strategy Recommended:
Position: BUY BPCL MAY 630 STRIKE CE
Entry: 10-10.50
Target: 18-22
Stop loss: 5
Holding period: 5-6 trading sessions.
Technical View
BPCL stock price has given bullish crossover on the short-term moving averages and is on the verge of consolidation breakout on the daily charts. "The Bollinger band (20,2) is facing in the northward direction and the stock price is expected to roll on the upper band of the same in the coming days. The support for the stock is around Rs 605-608 on the lower side with resistance at Rs 635 mark,” said Mantri.
Derivative Setup
The option chain analysis of BPCL stock for May series shows the highest call writing in Rs 620 CE, at 24.1 lakh shares. On other hand, highest put writing is seen in the Rs 600 PE (put option), with more than 18 lakh OI (open interest).
“Any breach of Rs 620 on the spot levels may trigger short covering in the counter, which may take the stock price towards Rs 630-635 levels in the short-term time frame. Short-term traders may consider the at-the-money (ATM) 630 CE of the current May series, keeping a bullish view on the stock,” said Mantri.
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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