I bought 10 lots of Zydus Life 1120-strike call option for ₹10. Kindly advise whether to hold or sell? – M A Khatri

Zydus Lifesciences (₹1,072): The stock has not been trending over the past two weeks. It has been fluctuating between ₹1,070 and ₹1,110. So, the short-term trend is uncertain at the moment for it depends on which direction the scrip moves out of the range.

But note that immediately below ₹1,070 are the supports at ₹1,030 and ₹1,000. That is, the stock has a series of supports ahead. Therefore, a breach of ₹1,070 will not give bears an advantage. Only a decisive break of the base at ₹1,000 can turn the trend bearish. This is unlikely to occur before the end of this expiry.

On the other hand, a breakout of ₹1,110 can lead to a fresh leg of rally. However, this, too, might happen only after the expiration of June contracts.

In either case, holding longs on call options does not appear to be an ideal strategy.

So, we suggest exiting the trade. Always be watchful of the number of lots you buy.

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