Nandish Shah recommends Bull Spread on Glenmark Pharma for March series

Nandish Shah recommends Bull Spread on Glenmark Pharma for March series

[ad_1]






Derivative Strategy


BULL SPREAD Strategy on Glenmark Pharma


Buy Glenmark Pharma (29-March Expiry) 440 CALL at Rs 7 & simultaneously sell 450 CALL at Rs 4


Lot Size: 1,450


Cost of the strategy: Rs 3 (Rs 4,350 per strategy)


Maximum profit: Rs 10,150 If Glenmark closes at or above 450 on 29 March expiry.


Breakeven Point: Rs 443


Approx margin required: Rs 22,000


Rationale:


>> Seen long build up in the Glenmark Future, around 2 per cent addition in Open Interest with price rising by 1.2 per cent


>> Short term trend of the stock turned bullish as stock price is trading above its 11 and 20 day EMA


>> During last few days, the stock price is forming support around 200 day EMA


>> RSI and MFI oscillator is placed above 50 and rising upwards on the daily and weekly chart, which indicates strength in the current uptrend


>> Pharma as a sector looking good on the short term charts


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

Disclaimer: Nandish Shah is Sr. Derivatives & Technical Research Analyst at HDFC Securities. He doesn’t hold any position in the stock. Views are personal.


[ad_2]

Source link

jones