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Derivatives and Quantitative Outlook…

* Broader markets seem to be moving into a consolidation phase after a sharp up move was seen in the last one year. However, stock specific moves are likely to continue while the focus should be on stocks with low leverage positions. UPL is one such stock, which seems to be moving out of the current consolidation and is likely to make fresh lifetime highs in coming weeks

* Chemical stocks have been one of the best performers in the last one year but UPL has been an underperformer. UPL has seen a gradual build-up of open interest in the last couple of months with recent price performance. However, there is ample room for further increase in open interest. We expect long additions in the stock once it sustains above | 640 levels

* From the options space, the major Call option base was in place at 620 and 650 strikes for the April series. With the recent move, further additions of positions are visible at these strikes. We believe sharp closure may be seen among these positions once the stock move above | 640 as the new series is just starting. On downsides, Put base is visible at 600 strike, which should act as immediate and major support for the stock in the coming weeks

* UPL has been consolidating around its 2020 highs of | 620 for the last couple of weeks. Despite recent market weakness, it was able to hold these levels and finally moved above the hurdle with an increase in delivery volume indicating ongoing accumulation in the stock

* UPL has been struggling to sustain above its long term mean+1*sigma levels since September 2019. As the stock was able to move above these levels in the recent up move, further momentum towards its 2*sigma, placed above | 700, cannot be ruled out

Buy UPL Ltd @ 625-635 TGT 735 SL 570 Time frame: Three months

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