F&O Strategy: Nandish Shah recommends Bull Call Spread on Glenmark Pharma

Derivative Strategy

BUY

MCDOWELL NOV FUT (United Spirits)

Buy: Rs 910

Target: Rs 940

Stop Loss: Rs 890

RATIONALE:

Long Build up is seen on Tuesday as Open Interest has increased by 6 per cent (Prov) with price rising by 3 per cent. The stock price has broken out on the daily chart with higher volumes.

OPTIONS STRATEGY

GLENMARK Bull Call Spread (24-Nov-Expiry)

Buy 440 Call at Rs 8.9 & simultaneously sell 450 Call at Rs 4.90

Strategy Cost Rs 4 (Rs 4,600 per strategy)

Maximum profit Rs 6,900; if Glenmark closes at or above Rs 450 on 24-Nov expiry

RATIONALE:

We have seen long build up in the Glenmark futures during the November series till now where we have seen 5 per cent rise in Open Interest with price rising by 9 per cent. The Primary trend of the stock turned positive as it has closed above its 200 day EMA. RSI Oscillator is showing strength in the stock.

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