Buy Petronet LNG 420 Call, Hindustan Unilever 920 Call: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "For this series, we are buying two Call options, one is Petronet LNG where we are buying 420 Call strike and another one is Hindustan Unilever which we bought in the last series also and this series again we are continuing with 920 Call option."

"Petronet has already seen almost six months of consolidation now and the open interest (OI) from 8 million shares, it has declined to 4 million shares. It was 8 million when it was Rs 390 and now when it is Rs 410, it is 4 million. So you can see the kind of short covering we have seen in the stock, which can take it higher from these levels looking at this long consolidation. 420 Call strike has much higher in open interest (OI). These are all the Call writers in the last two-three series, they were writing this particular stock, so eventually they are going to stuck up and we should start buying this particular Call option to get benefit of the closure of those positions," he said.

"In HUL, looking at the Put base at 900 strike, it is much higher and that is why either you write 900 Put options but the momentum is there towards Rs 960 levels. So, I will immediately buy 920 Call options in HUL because the closure has already started and the positions are shifting towards the higher strikes. So around Rs 17-18, you can buy this particular strike and it is possible looking at the FMCG space which has started moving up off late that you can start making money in this Call options also."

"We should look at those stocks which are near life highs but have spent enough time now near those levels because two things happen. Either there is a substantial short closure because people who try to go short eventually start coming out from that which brings lot of upsides in that. In that category Godrej Consumer comes because around Rs 1,600, from July 2016, it has remained near those levels and during this period, we have seen almost 110 percent of increase in OI. That was majorly the short positions. Now we have seen that 50 percent, almost the OI has become half and the stock has moved up from Rs 1,600 to Rs 1,700. My sense is that this move can now elongate to Rs 1,800 or Rs 1,850 levels also. We should remain positive despite being life highs, I think the risk reward is much favourable in this."

"In UPL, the OI is almost 40 percent lower. That means the stock has spent almost five-six months near these levels and we have seen that the leverage closer was very much evident. So, it is not very heavy in terms of the OI and that is why further upside is very much possible. Four months high volume that we saw around Rs 735, it has started closing above those levels now after a period of two months because of what we saw in the month of January. So my sense is that it is moving towards Rs 790-795, start buying the stock and keep a stop loss just below Rs 700," he added.