Here's a Bull Spread strategy on Sun Pharma by Nandish Shah of HDFC Sec

[NiveRoshni]

Here's a Bull Spread strategy on Sun Pharma by Nandish Shah of HDFC Sec



Bull spread Strategy on Sun Pharma

Buy Sun Pharma Feb 650 Call at Rs 20 & simultaneously sell Feb 680 Call at Rs 10

Lot Size: 1,400

Cost of the strategy: Rs 10 (Rs 14,000 per strategy)

Maximum profit: Rs 28,000 If Sun Pharma closes at or above 680 on 25 Feb expiry.

Breakeven Point: Rs 660

Rationale:

-- Long build-up was seen in Sun Pharma Futures' where we have seen 7 per cent rise in the Open Interest with price rising by 2 per cent.

- Long build-up was seen in Sun Pharma Futures' where we have seen 7 per cent rise in the Open Interest with price rising by 2 per cent.

-- The stock price has broken out on the daily chart, where it closed at highest level since September 2018, with higher volumes

-- Oscillators like RSI and MFI are showing strength in the stock

-- Primary trend of the stock is positive where it is trading above its 100- and 200-day EMA. 

-- The stock price has witnessed running correction of 10 per cent from the recent high

Source : https://wap.business-standard.com/article-amp/markets/here-s-a-bull-spread-strategy-on-sun-pharma-by-nandish-shah-of-hdfc-sec-121021200143_1.html