F&O Strategy for Biocon: HDFC Securities recommends a Bull Spread

The stock price of Biocon has broken out on the daily chart with higher volumes where it closed at highest level since June 7, 2023

BULL SPREAD Strategy on BIOCON
 

Buy BIOCON (29-June Expiry) 245 CALL at Rs 5.7 & simultaneously sell 250 CALL at Rs 3.70

Lot Size: 2,300
 

Cost of the strategy: Rs 2 (Rs 4,600 per strategy)

Maximum profit: Rs 6,900 If BIOCON closes at or above 250 on 29 June expiry.
 

Breakeven Point: Rs 247
 

Approx margin required: Rs 20,000

Rationale:

>> We saw long build up in Biocon on Thursday, where we saw 1 per cent addition in Open Interest (Prov) with price rising by 0.64 per cent.
 

>> The stock price has broken out on the daily chart with higher volumes where it closed at highest level since June 7, 2023.

 

>> RSI Oscillator(11) is placed above 50 on the daily chart and sloping upwards, suggesting strength in the current uptrend.

>> Pharma stocks are in an uptrend and are likely to do well in the short to medium term.

Note : It is advisable to book profit in the strategy when ROI exceeds 20%.



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Disclaimer: Nandish Shah is senior derivatives & technical research analyst at HDFC Securities. He doesn't hold any position in the stock. Views are personal.