The question raised in this article concerns whether to hold or exit a Biocon 320-put option that was purchased for ₹1.15 with a January expiry. The analysis provided by the expert suggests that holding onto the option could be a viable strategy due to the current market conditions and the potential price movement of the stock.
Biocon’s stock price has shown signs of outperforming the broader market, although it has been moving in a sideways trend since July. The stock is currently trading near the upper end of its trading range, with resistance at ₹385-395. There is a possibility of a price drop, potentially down to ₹350 where the 20-day moving average lies, or even further down to ₹325 where the 50-day moving average is situated.
Considering the potential price drop in the near future, it is advisable to hold onto the 320-put option. The expert suggests that if the stock price declines to the range of ₹350-335 in about a week, the option’s premium could rise to a target of ₹2, providing a profitable exit opportunity.
In conclusion, based on the analysis provided, holding onto the Biocon 320-put option could yield favorable results in the coming days. Traders are advised to monitor the stock price closely and consider exiting the position if the price drops to the suggested levels to maximize profits.
