Here's a derivative strategy on Tata Motors by HDFC Securities

Long build up was seen in the Tata Motor Futures' on Thursday where we have seen 67% (Prov) rise in the Open Interest with price moving up by 2.9%.

Bull Spread strategy on Tata Motors

Buy TATA MOTOR June 90 Call at Rs 6.3 & simultaneously sell June 100 call at Rs 3.3

Lot Size 4300

Cost of the strategy Rs 3 (Rs 12900 per strategy)

Maximum profit Rs 30100 If Tata Motor closes at or above 100 on June expiry

Breakeven Point Rs 93

Rationale:

• Long build up is seen in the Tata Motor Futures’ yesterday where we have seen 67%(Prov) rise in the Open Interest with price moving up by 2.9%.
• 5-day SMA has crossed the 20-day SMA, indicating short term trend turned positive
• Stock price has broken out on the daily chart yesterday to close at highest level since 13 may with higher volumes
• RSI Oscillators is placed above 5o level on the daily chart Indicating bullish set up for the stock
• Nifty Auto Index has broken out on the daily chart to close at two months high