2 weeks Ago
Shares of Britannia Industries have been in an uptrend for a long time now, forming higher highs and higher lows on the daily and monthly charts. The last swing low was where the stock took support near Rs 5,634 level and during its uptrend, the stock took support on its 10 DEMA . On August 20, the stock witnessed the golden crossover, where the 10 DEMA cut through 20 DEMA from the lower side, and the stock has since then been in an upward direction.
Britannia is in a long-term uptrend, trading at Rs 6,338.15, close to its record-high levels. “A robust bullish candle on the daily chart, along with increased trading volumes, supports the likelihood of a continued uptrend.
If the stock sustains above the Rs 6,365 level after bouncing from its support zones, it could move further towards new highs,” said Hardik Matalia, Derivatives Analyst at Choice Broking. Stock Trading Market 101: An Insight into Trendlines and Momentum By - Rohit Srivastava, Founder- Indiacharts.com View Program Stock Trading Markets 102: Mastering Sentiment Indicators for Swing and Positional Trading By - Rohit Srivastava, Founder- Indiacharts.
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Additionally, Britannia has recently rebounded from its short-term (20-day) and medium-term (50-day) Exponential Moving Averages (EMAs), reinforcing the strength of its uptrend. Further, the Option data reveals the highest Put (PE) open interest at the Rs 6,300 strike, indicating immediate support, while the highest Call (CE) open interest at Rs 6,500 suggests potential resistance. “A breakout above this level could lead to short covering, potentially driving the stock higher,” believes Matalia.
With this, Hardik Matalia suggests deploying a Broken Wing strategy in Britannia Industries for potential gains. Broken Wing The Broken Wing Options Strategy, specifically the Broken Wing Butterfly (BWB), is a variation of the classic butterfly spread, which is used to take advantage of directional market moves while reducing risk and cost. It is called a "broken wing" because one of the wings of the butterfly is intentionally unbalanced to create a skewed risk/reward profile.
This strategy lowers the initial cost or generates a credit, while limiting both risk and reward on one side of the trade, typically used to capitalize on small directional moves with defined risk. ETMarkets.com (Prices as of September 30) Below is the payoff graph of the strategy: ETMarkets.
com (Source: Choice Broking) ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel ).
