Buy Ranbaxy Laboratories 580 Call: VK Sharma

Sharma told CNBC-TV18, "Both Ranbaxy and Aurobindo Pharma have shown quite a good amount of building of positions in the current series. Ranbaxy we have had a 38% rise in open interest. The stock has gone up 4% over the last three days. So there I am suggesting buying the 580 Call available at Rs 12. So bank that putting a stop loss of Rs 8 and hoping to sell it at Rs 22 is my strategy in Ranbaxy."

He further added, "In case of Aurobindo the open interest buildup is pretty high, almost 32%. The stock has gone up almost by 18% from the lower levels. So here I am suggesting building a bull spread here. So 120 call you can buy at Rs 5.30 and 130 call which can be sold at Rs 2.50. That brings your cost to Rs 2.80 and possibly your profit can be as high as Rs 7.20. The risk reward ratio is pretty good, almost 2.57:1. So pharma as a sector has done well and can continue to do well in the current series as well."