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Here is a Bull Spread Strategy on Glenmark Pharma by HDFC Securities

The stock price has already given bullish breakout from the downward slopping trendline adjoining the highs of 08-Dec-2020 and 12-Jan-2021

Topics
Stock calls | Derivatives strategy | Markets

Nandish Shah  |  Mumbai 

Glenmark Pharmaceuticals

Bull spread Strategy on GLENMARK

Buy GLENMARK APRIL 510 CALL at Rs 19 & simultaneously sell 540 CALL at Rs 9

Lot Size 1150

Cost of the strategy Rs 10 (Rs 11,500 per strategy)

Maximum profit Rs 23000 If GLENMARK closes at or above 540 on 29 April expiry.

Breakeven Point Rs 520

Rationale:

  • Long build up is seen in the Glenmark Futures’ during the April series till now where we have seen more than 40% rise in the Open Interest with price rising by 14% during the series.
  • The stock price has already given bullish breakout from the downward slopping trendline adjoining the highs of 08-Dec-2020 and 12-Jan-2021
  • Short term trend of the stock is positive as stock price 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
  • Oscillators like RSI and MFI showing strength 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.

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First Published: Fri, April 09 2021. 08:19 IST
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