Option strategy of the day | Significant change in OI in Bharti Airtel signals long call

Bharti Airtel’s stock momentum continues to favour bulls, despite the overall market showing disconcert on global cues. The stock price closed higher on Monday, with an addition of 7 lakhs in Open Interest (OI), totalling over 3 crore.

According to Avdhut Bagkar, Derivatives and Technical Analyst at StoxBox, “Higher OI was seen in both 1200 CE and PE, along with 1240 CE and 1250 CE exhibiting a long build-up. The trading volume stands at 67 lakhs, and the price trades at a 6-point premium.”

Bagkar recommends taking a long position in 1220 CE around 21, with a stop loss at 15 and targeting levels of 30 and 37 within a one-week timeframe.

Payoff chart of 1220 CE long position

Technical view

“A substantial concentration can be seen in 1200 CE and 1250 CE, highlighting a trend in the long direction. Higher OI was seen in both 1200 CE and PE, along with 1240 CE and 1250 CE exhibiting a long build up. While there appears a hurdle around the 1250 mark, technical indicators are exhibiting a breakout over it, ” said Bagkar.

Bagkar highlights that the April series is exhibiting rise IO for Bharti Airtel, despite the price action taking a sideways trend. The PCR stands at 0.46 for the April contract.

“The trading volume stands at 67 lakhs and the price trades at 6 points premium. More participation is expected once the price crosses the 1,250 mark, delivering breakout towards 1320 levels.”

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