Option strategy of the day | Consolidation breakout in PI Industries; use covered call for upside

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PI Industries Ltd shares are on the verge of a consolidation breakout on the weekly charts. Technical and derivative data indicate a long buildup in the stock, suggesting upside momentum.

On June 20 at 1:20 PM, PI Industries was trading up 142 points, or 3.91 percent, at Rs 3,790.

"The stock is trading with a positive bias and is on the verge of a consolidation breakout on the weekly charts. The counter looks strong and is expected to surpass the psychological mark of 3,900-4,000-plus levels on the daily charts in the coming week," said Arun Kumar Mantri, Founder of Mantri Finmart.

Trade Recommendation: Buy one lot of PIIND June Futures at Rs 3765 and Sell one lot of PIIND June 3850 CE at Rs 37.

Also read: F&O Manual | Indices trade rangebound; 23,500 acting as crucial support

First Leg: Buy Future at Rs 3765

Second Leg: Sell Call Option (CE)

Break-Even Point: 3728 (Future Levels)

Max Profit: Rs 29,250

Max Loss: Unlimited Below BEP

Stoploss:  3710 (Spot Levels)

Mantri highlights that the technical indicators are exhibiting bullish signs, and the positive momentum is likely to continue in the coming sessions based on the recent price and volume action.

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