Derivative strategy on Sun Pharma by Chandan Taparia of Motilal Oswal

Strategy:

SUNPHARMA – BULL CALL SPREAD
BUY 1 LOT OF 540 CALL
SELL 1 LOT OF 560 CALL

NET PREMIUM PAID : 6 POINTS

MAX RISK : 6 POINTS (Rs 4800/-)
MAX REWARD : 14 POINTS (Rs 11200/-)

Rationale:

1) It has given breakout from its major triangle pattern
2) Supports are gradually shifting higher
3) Fresh Put writing could support it to give the breakout
4) Thus a low risk, Bull Call Spread is recommended

Disclaimer: The analyst may have position in the stock mentioned above.


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