The stock has recently formed a Bullish Pennant pattern on the daily chart—a continuation pattern—and has now given a decisive breakout above this formation.
“This price action signals the potential for further upside, provided the stock sustains above the breakout zone, supported by continued buying interest,” said Hardik Matalia, Derivatives Analyst at Choice Broking.Technically, the stock is maintaining a strong structure as it comfortably trades above all its key moving averages—short-term, medium-term, and long-term EMAs—indicating a stable and upward trend across multiple timeframes.
“This alignment adds strength to the ongoing bullish momentum and reflects improving price stability,” Matalia added.
The Relative Strength Index (RSI) is currently at 62.11, trending upward, which further confirms the strengthening momentum. The RSI’s trajectory suggests increasing bullish pressure, enhancing the conviction for a continued up move as buyers remain active.
From a derivatives perspective, the data supports the bullish setup. The highest Call Open Interest (OI) is placed at Rs 7,100, and with the stock now trading above this level, any further rise could trigger short covering, adding fuel to the rally.
On the flip side, the highest Put OI is at Rs 7,000, which now serves as a strong support zone, providing a cushion against potential downside risks.
Matalia believes that if the stock manages to sustain above the breakout level, the stock could gain upward momentum in the coming sessions, potentially aiming for higher levels in the medium term.
“A sustained move above Rs 7,114 will confirm trend continuation and could attract further buying interest, reinforcing the bullish outlook,” he noted.
With this, Hardik Matalia suggests deploying a Bull Call Spread in Apollo Hospitals for potential gains from the bullish momentum.
Bull Call Spread
Traders may deploy a Bull Call Spread to monetize gains from a potential market rebound. It involves buying and selling call options with the same expiration but 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 June 16)
Below is the payoff graph of the strategy:
ETMarkets.com(Source: Choice Broking)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
