Here is a Bull Spread Strategy on Alkem Labs by Nandish Shah of HDFC Sec

Bull spread Strategy on ALKEM LAB

Buy ALKEM SEPT 4000 CALL at Rs 78 & simultaneously sell 4100 CALL at Rs 48

Lot Size 200

Cost of the strategy Rs 30 (Rs 6000 per strategy)

Maximum profit Rs 14000 If ALKEM closes at or above 4100 on 30 Sept expiry.

Breakeven Point Rs 4030

Rationale:

We have seen long build up in the ALKEM Futures, where we have seen 11% rise (Prov) in the Open Interest with price rising by 1.5%.

The stock price has broken out on the daily chart as it closed at all time high with higher volumes.

The RSI and MFI Oscillators are placed above 60 and sloping upwards, indicating strength in the current uptrend.

Plus DI is trading above Minus DI while ADX line is placed above 25, indicating momentum in the current uptrend.

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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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