United Spirits Limited is maintaining a positive trend in its long-term Elliott Wave structure according to monthly chart analysis. A distinct shift from correction to impulse since 2020–2021 suggests a new bullish cycle, with key Fibonacci targets in range.
From the Wave IV low, the price has moved in a five-wave structure. Waves (1) and (2) have defined the trend direction, with Wave (3) showing strong upward momentum. Wave (4) appears to be a sideways contracting triangle, signalling a potential rise in Wave (5).
Fibonacci extension levels mark the upside targets. The ₹1,798 zone corresponds with the 1.236 extension, seen as a cautious fifth-wave target. A reach towards ₹1,962 aligns with the 1.618 Fibonacci level. Price may react around these areas as Wave I nears completion.
After Wave I ends, a corrective Wave II is expected, with support anticipated near the 0.382 retracement level, around ₹1,208. This aligns with previous price structures, suggesting a potential technical reaction. Such a pullback is viewed as corrective, not a trend reversal.
The analysis indicates selling is not advisable. The Elliott Wave structure remains valid as long as the price stays above ₹84, suggesting long-term bullish opportunities.
Given the current consolidation, which we see as a Wave (4) triangle, option premiums are relatively subdued. Implied volatility for United Spirits has compressed, dropping to near 22% in early December 2025 from over 30% during the post-earnings spike in October. This environment makes it cheaper to establish long positions for the next expected move higher.
For the coming weeks, we believe a bull call spread is an effective strategy to target the anticipated Wave (5) rally. A trader could consider buying a January 2026 expiry call option with a strike price around ₹1,600 and simultaneously selling a call at the ₹1,800 strike. This defined-risk trade is designed to profit from the expected move towards the initial ₹1,798 target.
A more conservative approach would be to sell out-of-the-money put credit spreads, which aligns with the view that selling is not recommended. For instance, selling a January 2026 ₹1,400 put while buying a ₹1,350 put for protection collects premium and profits as long as the stock stays above the short strike. This strategy is supported by the company’s strong performance, having reported a 15% year-over-year increase in net profit for the quarter ending September 2025.
Market data reinforces this bullish outlook, as we have observed a significant buildup in open interest for the January 2026 ₹1,700 and ₹1,800 call options. This suggests that other market participants are also positioning for a substantial upward move in the near future. The continued narrative around premiumization in the beverage sector further supports this sentiment.
As the stock price moves towards the ₹1,798–₹1,962 target zone, traders should become vigilant for signs of the rally losing momentum. We recall a similar sharp rally in 2023 that was followed by a multi-month correction. Once Wave I appears to be complete, it would be prudent to take profits on bullish positions in anticipation of the corrective Wave II pullback towards the ₹1,208 level.
Any short-term weakness during this current consolidation should be viewed as an opportunity to build positions rather than a signal of a trend change. We saw a similar sideways pattern in late 2024 before the price broke upwards from the ₹1,350 level. With the primary trend remaining firmly up, the strategic focus should be on positioning for the next leg higher.
