Bull spread Strategy on Dr Reddy’s Labs
Buy DR REDDY’S MARCH 4,600 Call at Rs 182 & simultaneously sell 4,800 Call at Rs 106
Lot Size: 125
Cost of the strategy: Rs 76 (Rs 9,500 per strategy)
Maximum profit: Rs 15,500 If Dr Reddy’s closes at or above 4,800 on March 25 expiry.
Breakeven point: Rs 4,676
— Long build-up was seen in the Dr Reddy Futures’ where we have seen 4 per cent (Prov) rise in the Open Interest with price rising by 1 per cent.
— The stock price has broken out on the daily chart where it closed above 200-day EMA with higher volumes.
— The stock price has formed double bottom around 4,380-odd levels
— Oscillators like RSI and MFI are showing strength in the stock
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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