Option strategy of the day| Long build up in HindPetro; Covered call strategy recommended

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26 Aug, 2025 12:21

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HindPetro Ltd shares have given a breakout above the highs established in the past few weeks. Technical analysis indicates a bullish setup, suggesting that the stock is likely to outperform in the upcoming sessions.

"The stock has been gaining momentum over the past few days and may outperform the broader market in the next 4-5 sessions," said Arun Kumar Mantri, Founder of Mantri Finmart.

To capitalize on this upside momentum, Mantri recommends a covered call strategy on HindPetro.

Trade details:Position: Buy 1 Lot Hindpetro September Futures at Rs 407 and

Sell 1 Lot of Hindpetro September 420 CE at Rs 10.5

Holding period: 5-6 trading sessions

Stop loss: Rs 395 (Spot levels)

Technical Analysis:

Mantri highlights that the stock is currently in a cycle of higher highs and higher lows and is on the verge of breaking out above recent resistance levels on the daily charts. The recent price performance indicates strength, which is expected to sustain the positive momentum in the coming days. "The stock is comfortably trading above its 21, 50, 100, and 200 DEMA on both daily and weekly charts, signaling strength. Leading indicators, such as Parabolic SAR and MACD, also point to a positive trend in the near term," Mantri added.

On the derivatives front, Mantri notes that there is significant put writing at the 400 strike price, which should provide strong support. Meanwhile, the 425-430 range is expected to act as stiff resistance, as evident from the substantial call writing in the September series.

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.