Zydus Life stock: When to book profit? Advice from HDFC Sec's Nandish Shah

Price rise is accompanied by the rise in the volume, suggesting strength in the uptrend. Stock price has broken out on the daily chart with higher volumes to close at highest level since 10 April 2024

BULL SPREAD Strategy on ZYDUS LIFE

Buy ZYDUS LIFE (30-MAY Expiry) 1020 CALL at Rs 24.10 & simultaneously sell 1050 CALL at Rs 15.10
 

Lot Size 900

Cost of the strategy Rs 9 (Rs 8100 per strategy)

Maximum profit Rs 18900 If ZYDUS LIFE closes at or above Rs 1050 on 30 May expiry.

Breakeven Point Rs 1029

Risk Reward Ratio 1:2.33

Approx margin required Rs 31100

Rationale:

 Long build up is seen in the ZYDUS LIFE Futures where we have seen 6%(Prov) rise in Open interest with price rising by 3.6%.

 Price rise is accompanied by the rise in the volume, suggesting strength  in the uptrend.

 Zydus Life stock price has broken out on the daily chart with higher volumes to close at highest level since 10-April-2024.

 Zydus Life Stock price has been forming bullish higher top higher bottom formation on the weekly charts.

 RSI Oscillator is in rising mode and placed near 60 on the daily chart, indicating strength in the stock.

It is advisable to book profit in the strategy when ROI exceeds 20 per cent.

Disclosure:

I, NANDISH SHAH, (MS FINANCE), author and the name subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. SEBI conducted the inspection and based on their observations have issued advise/warning. The said observations have been complied with. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. 

Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. 

Any holding in stock – No 

HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.