Bull Spread strategy on UPL

Buy UPL 530 CALL at Rs 18.55 & simultaneously sell 550 Call at Rs 11.55

Lot Size 1300

Cost of the strategy Rs 7 (Rs 9100 per strategy)

Maximum profit Rs 16900 If UPL closes at or above 550 till September expiry

Breakeven Point Rs 537

Rationale:

Long build up is seen in the UPL Futures’ where we have seen 4%(Prov) rise in the Open Interest with Price moving up by 4%.

The stock price has broken out on the daily chart where it closed at six months high, highest since 27 Feb.

The stock price is taking support at 200-day EMA

Short term trend of the stock is positive where stock price is trading above its 5- and 20-day Moving Averages.

Oscillators like RSI & MFI are showing strength in the stock

+DI is trading above Minus DI while ADX is placed above 25, indicating momentum in the 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.