“A breakout above the recent swing high of Rs 1,119 further reinforces the bullish sentiment,” said Aakash Shah, Research & Derivatives Analyst at Choice Broking. Meanwhile, the stock remains well above its 20-day, 50-day, and 200-day exponential moving averages (EMAs), signaling strength across short-, medium-, and long-term timeframes.
With the Relative Strength Index (RSI) at 78.29 and climbing, buying momentum remains strong, even as the indicator flags near-term overbought conditions.
Shah further noted that the immediate resistance is placed at Rs 1,150. “A decisive breakout above this level, supported by strong volumes, could trigger the next leg of the rally, potentially driving the stock toward Rs 1,233. On the downside, immediate support is seen at Rs 1,092,” he added.
With this, Aakash Shah suggests that traders may consider initiating long positions around Rs 1,128.50, with a stop loss at Rs 1,076 and an upside target of Rs 1,233. To play this move, he recommends a Bull Call Spread strategy in Laurus Labs shares.
Bull Call Spread
Traders may consider deploying a bull call spread to capitalize on a potential market rebound. The strategy involves buying and selling call options with the same expiry but at different strike prices. The purchased call is typically in-the-money (ITM) or at-the-money (ATM), while the sold call is out-of-the-money (OTM). This strategy results in a net debit for the trader, as the cost of the ITM/ATM call is partially offset by the cash flow generated from shorting the OTM call.
ETMarkets.com(Prices as of January 7)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)