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Here's a Bull Spread Strategy on Aurobindo Pharma by HDFC Securities

Long build up was seen in Aurobindo Pharma futures where we have seen a 16 per cent rise in the Open Interest with price rising by 3%.
Bull Spread Strategy on Aurobindo Pharma

Buy Aurobindo Pharma Dec 900 Call at Rs 30 and simultaneously sell Dec 960 Call at Rs 10

Lot Size: 650

Cost of the strategy: Rs 20 (Rs 13,000 per strategy)

Maximum profit: Rs 26,000 if Aurobindo Pharma closes at or above 960 till 31 Dec expiry

Breakeven Point: Rs 920

Rationale:

-- Long build up was seen in Aurobindo Pharma futures where we have seen a 16 per cent rise in the Open Interest with price rising by 3%

-- Stock Price has broken out from the downward slopping trendline, adjoining the highs of December 7 and December 21 on the daily chart with higher volumes

-- RSI Oscillator is showing strength in the stock; DI is trading above minus DI while ADX is placed above 25, indicating momentum in the current uptrend

-- Pharma as a sector is showing strength on the chart



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