The stock of Sun Pharmaceuticals remains at crucial level. If the current trend sustains, the stock could reach ₹702. If it manages to go above that level, that would turn the long-term outlook positive. On the other hand, if Sun Pharma fails to sustain at current levels, it could find support at ₹603 and the major one at ₹549. A close below the latter will change the outlook to negative for the stock, which could then weaken to ₹363 level.
However, we expect the stock to maintain the current bullish trend.
The maximum loss in this strategy is the premium paid (i.e. ₹10,570), if Sun Pharma sustains at ₹640 or dips. On the other hand, a profit of ₹17,430 is possible if the stock closes at or above ₹660. We advise traders to hold the position till expiry.
Follow-up: Last week, we had advised a put-spread strategy on Titan. The stock moved on expected lines on the first three days and did provide a profit opportunity but bounced back on Thursday and Friday.