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Here is a Bull Spread Strategy on Divi's Labs by Nandish Shah of HDFC Sec

The short term trend is positive where the stock is trading above its 5-, 20- and 50-day EMA

Topics
Derivative trading | Divis Labs | HDFC Securities

Nandish Shah  |  Mumbai 

Divis Labs
The stock price has broken out on the daily and weekly chart.

Bull spread Strategy on DIVI’S LAB

Buy DIVI’S LAB MAY 4000 CALL at Rs 157 & simultaneously sell 4200 CALL at Rs 95

Lot Size 200

Cost of the strategy Rs 62 (Rs 12400 per strategy)

Maximum profit Rs 27600 If DIVI’s LAB closes at or above 4200 on 27 May expiry.

Breakeven Point Rs 4062

Rationale:

We have seen long build up in the Divis Lab Futures on Thursday where we have seen 21%(Prov) rise in the Open Interest with price rising by 0.7%.

The short term trend is positive where it is trading above its 5-, 20- and 50-day EMA.

Plus DI is trading above Minus DI while ADX line is placed above 25, Indicating momentum in the current uptrend.

The stock price has broken out on the daily and weekly chart.

Oscillators like RSI is showing strength in the current uptrend.

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Disclaimer: Nandish Shah is Technical Research Analyst at He doesn't hold any position in the stock. Views are personal.

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First Published: Fri, April 30 2021. 08:30 IST
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