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Here's a Bull Spread strategy on Sun Pharma by Nandish Shah of HDFC Sec

The stock price has witnessed running correction of 10 per cent from the recent high

Topics
Markets | Market technicals | Sun Pharma

Nandish Shah  |  Mumbai 

stock, market, shares, investment, investors, trading, sensex, growth, technology

Bull spread Strategy on

Buy Feb 650 Call at Rs 20 & simultaneously sell Feb 680 Call at Rs 10

Lot Size: 1,400

Cost of the strategy: Rs 10 (Rs 14,000 per strategy)

Maximum profit: Rs 28,000 If closes at or above 680 on 25 Feb expiry.

Breakeven Point: Rs 660

Rationale:

-- Long build-up was seen in Sun Pharma Futures’ where we have seen 7 per cent rise in the Open Interest with price rising by 2 per cent.

-- The stock price has broken out on the daily chart, where it closed at highest level since September 2018, with higher volumes

-- Oscillators like RSI and MFI are showing strength in the stock

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

-- The stock price has witnessed running correction of 10 per cent from the recent high


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, February 12 2021. 08:11 IST
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