Here's a Bull Spread Strategy on Aurobindo Pharma by HDFC Se

Here's a Bull Spread Strategy on Aurobindo Pharma by HDFC Securities


Bull Spread Strategy on Aurobindo Pharma
Buy Aurobindo Pharma Dec 900 Call at Rs 30 and simultaneously sell Dec 960 Call at Rs 10
Lot Size: 650
Cost of the strategy: Rs 20 (Rs 13,000 per strategy)
Maximum profit: Rs 26,000 if Aurobindo Pharma closes at or above 960 till 31 Dec expiry
Breakeven Point: Rs 920
Rationale:
-- Long build up was seen in Aurobindo Pharma futures where we have seen a 16 per cent rise in the Open Interest with price rising by 3%
-- Stock Price has broken out from the downward slopping trendline, adjoining the highs of December 7 and December 21 on the daily chart with higher volumes
-- RSI Oscillator is showing strength in the stock; DI is trading above minus DI while ADX is placed above 25, indicating momentum in the current uptrend

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