Bull spread Strategy on Dr Reddy s Labs Buy DR REDDY S MARCH 4,600 Call at Rs 182 & simultaneously sell 4,800 Call at Rs 106
Lot Size: 125
Cost of the strategy: Rs 76 (Rs 9,500 per strategy)
Maximum profit: Rs 15,500 If Dr Reddy s closes at or above 4,800 on March 25 expiry.
Breakeven point: Rs 4,676
Rationale: Long build-up was seen in the Dr Reddy Futures’ where we have seen 4 per cent (Prov) rise in the Open Interest with price rising by 1 per cent. The stock price has broken out on the daily chart where it closed above 200-day EMA with higher volumes. The stock price has formed double bottom around 4,380-odd levels
Buy IOC Feb 100 Call at Rs 2.30 & simultaneously sell Feb 105 Call at Rs 0.95 Lot Size 6500 Maximum profit Rs 23725 If IOC closes at or above 105 on 25 Feb expiry. Breakeven Point Rs 101.35
Rationale: Long build up was seen in the IOC Futures’ where we have seen 12 per cent (Prov) rise in the Open Interest with price rising by 4 per cent. The stock price has broken out on the daily chart (Adjusted for dividend) where it closed at highest level since March 2020 with higher volumes Plus DI has crossed the Minus DI, indicating strength in the current uptrend The primary trend of the stock is positive where it is trading above its all-important moving averages.
Read more about Here s a Bull Spread strategy on Sun Pharma by Nandish Shah of HDFC Sec on Business Standard. The stock price has witnessed running correction of 10 per cent from the recent high
Rationale: Long build-up was seen in the Bajaj Fin Futures’ where we have seen 16 per cent (Prov) rise in the Open Interest with price rising by 5 per cent. The stock price has broken out on the daily chart with higher volumes Oscillators like RSI and MFI are showing strength in the current uptrend Plus DI is trading above minus DI while ADX line is placed above 20, Indicating momentum in the stock
Disclaimer: Nandish Shah is Technical Research Analyst at HDFC Securities. He doesn t hold any position in the stock. Views are personal. Dear Reader,
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Buy Tata Power Feb 80 Call at Rs 3.9 & simultaneously sell Feb 85 Call at Rs 2.50 Lot Size 13500 Cost of the strategy Rs 1.4 (Rs 18900 per strategy) Maximum profit Rs 48600 If Tata Power closes at or above 85 on 25 Feb expiry. Breakeven Point Rs 81.4
Rationale: Long build up was seen in the Tata Power Futures where we have seen 3 per cent rise in the Open Interest with price rising by 1 per cent. We have seen healthy rollover of 85 per cent to the February series with increase in rollover cost. The stock price has reached to a support of level of 50-day EMA. Primary trend of the stock is positive where it is trading above its 100 and 200 day EMA.