LONG CALL OPTION STRATEGY ON TATASTEEL

Prof. Sangram Keshari Jena

Specialization: Finance & Economics

Designation: Associate Professor

 Last 15 days (September 21 till date) Tata steel is trading in a broad range between 1344 and 1274 in an upward rising channel. At the end trading on 6^th October 2021, Tata steel is closed at 1279.90, down by 17% from its all-time high. It is trading at the support zone of rising channel. Although it is trading below the 200 simple moving average (SMA), the short term 20 days SMA is above the 50 days SMA. Thus, short term trend is positive. The open interest concentration chart shows maximum put writing is at 1300 and 1260 strike price which implying a support zone in the downside. The maximum concentration of call writing is seen at 1300 strike price indicating a strong supply zone on the upside. Tata steel expected take support at this level and if it crosses above 1300 level, it will further rise to 1400 level.