Bull Spread strategy on Lupin by Nandish Shah of HDFC Securities

Bull Spread strategy on Lupin

Buy Lupin 860 Call at Rs 36 & simultaneously sell 900 call at Rs 21

Lot Size: 700

Cost of the strategy: Rs 15 (Rs 10,500 per strategy)

Maximum profit: Rs 17,500 If Lupin closes at or above 900 on May expiry.

Breakeven Point: Rs 875

Rationale:

-- Long build up is seen in Lupin Futures’ where we have seen 2 per cent(Prov) rise in the Open Interest with price moving up by 2.8 per cent
 

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

-- The stock price is taking support at 20-day SMA and has been trading above its 20-day simple moving average since 01 April 2020
 

-- RSI Oscillators is placed over 60 level while MACD is trading above the central line Indicating bullish set up for the stock

Pharma as a sector looking good on the chart

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Disclaimer: Nandish Shah is a Technical & Derivative Analyst at HDFC Securities. Views are personal.