Business Standard
Web Exclusive

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

Short term trend of the stock is positive where stock price is trading above its 5- and 20-day Moving Averages

Topics
Stock calls | Derivative trading | UPL

Nandish Shah  |  Mumbai 

The stock price has broken out on the daily chart where it closed at six months high
The stock price has broken out on the daily chart where it closed at six months high

Bull Spread strategy on UPL

Buy 530 CALL at Rs 18.55 & simultaneously sell 550 Call at Rs 11.55

Lot Size 1300

Cost of the strategy Rs 7 (Rs 9100 per strategy)

Maximum profit Rs 16900 If closes at or above 550 till September expiry

Breakeven Point Rs 537

Rationale:

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

The stock price has broken out on the daily chart where it closed at six months high, highest since 27 Feb.

The stock price is taking support at 200-day EMA

Short term trend of the stock is positive where stock price is trading above its 5- and 20-day Moving Averages.

Oscillators like RSI & MFI are showing strength in the stock

+DI is trading above Minus DI while ADX is placed above 25, indicating momentum in the uptrend

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

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, September 04 2020. 08:08 IST
RECOMMENDED FOR YOU
.