JSPL Options Radar: Deploy bull call spread to gain from gradual price rise

Jindal Steel & Power has been consistently surpassing its moving averages and aligning closely with the Nifty Metal index. Having ended Tuesday’s session at Rs 935 on BSE, the stock is giving compelling technical signals on its daily chart, notably characterized by the formation of a bullish candle.

Notably, Jindal Steel boasts a sturdy support zone near Rs 904 levels, coinciding with its 20-day Exponential Moving Average (EMA), reinforcing its underlying strength.


The stock has been showing resistance in breaching its previous all time high mark around Rs 945 where it has attempted to breach the mark but ended up closing below the same in the past few sessions. However, an opening above Rs 949 today can open room for the stock's upward movement towards new highs.

“JSPL confronts a minor resistance zone around Rs 947 levels, aligning with its all-time high levels. A decisive breakthrough above this resistance barrier could potentially catalyze an upward trajectory towards the target price of Rs 965, as per Fib Extension analysis” says Deven Mehata, research analyst at Choice Broking.

The stock maintains its positioning above pivotal moving averages, affirming its positive momentum. Further reinforcing this sentiment, the Relative Strength Index (RSI) stands at 67.67, underscoring the stock’s robustness.

Traders are advised to consider initiating positions in Jindal Steel via option strategy below given by Deven Mehata:

Bull Call Spread

The aim is to profit from a gradual price rise in the underlying stock. A bull call spread consists of one long call with a lower strike price and one short call with a higher strike price.

Both calls have the same underlying stock and the same expiration date. A bull call spread is established for a net debit (or net cost) and profits as the underlying stock rises in price. Profit is limited if the stock price rises above the strike price of the short call, and potential loss is limited if the stock price falls below the strike price of the long call (lower strike).

(Prices as of 30.04.2024)

Below is the payoff chart of the deployed strategy:

(Source: Choice Broking)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)