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Here's a Bull Spread Strategy on Lupin by Nandish Shah of HDFC Securities

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

Topics
Derivative trading | Derivatives strategy | Market technicals

Nandish Shah  |  Mumbai 

Stock price has broken out from the downward slopping trendline on the daily line chart
Stock price has broken out from the downward slopping trendline on the daily line chart

Bull Spread strategy on Lupin

Buy Oct 1060 CALL at Rs 42.5 & simultaneously sell 1100 Call at Rs 27.5

Lot Size 850.

Cost of the strategy Rs 15 (Rs 12750 per strategy)

Maximum profit Rs 29750 If closes at or above 1100 till October expiry.

Breakeven Point Rs 1075

Rationale:

Long build up is seen in the Futures’ where we have seen 4%(Prov) rise in the Open Interest with Price rising by 2%.

Stock price has broken out from the downward slopping trendline on the daily line chart

Stock price is taking support at 20-day SMA since last few days

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

RSI Oscillator is placed above 60 level, Indicating strength in the stock

+DI is trading above Minus DI while ADX is placed above 20, indicating strength in the uptrend

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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, October 09 2020. 07:49 IST
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