We recommend buying in the following stock options with the
view of a contemporary support at 3000 levels for the Nifty
Index
L&T: L&T futures observed signifi cant addition of short positions
last week. At the same time, the stock has fallen around 10% on a
weekly basis. The L&T stock would be one of the fi rst movers due
to the expected short covering.
Buy L&T Oct 840 call option @ 28-30; Stop Loss: 18; Target:
45-50; Time Frame: 5-7 Days
Reliance: Reliance observed distress selling in the past few sessions
with increasing volumes. The stock lost more than 14% last week and
caused maximum damage to the broader index. However, value buying
in the stock at current levels cannot be ruled out. We recommend
buying an ATM call option with a strict stop loss.
Buy Reliance 1320 call option @ 72-75; Stop Loss: 60; Target:
105-110; Time Frame: 5-7 Days
RCom: RCom touched new lows before bouncing back as value
buying emerged in the stock last week. The stock was one of the major
victims of the recent turmoil in the broader market. The stock may
observe sharp upsides with the support of the broader market.
Buy RCom 240 call option @ 14-16; Stop Loss: 10; Target: 22-24;
Time Frame: 5-7 Days
DLF: The stock has outperformed the broader index last week
and remained stable around 290 levels. The buyback in the stock
is supposed to give some momentum to the stock in the next few
sessions. We recommend a covered call in DLF.
Buy DLF Oct Futures @ 285-288; Sell DLF Oct 300 Call Option
@ 18-20; Stop Loss: 275; Time Frame: Expiry
ICICI Bank: Banking stocks observed some relief from the RBI’s
intervention through a 250-basis point cut in CRR in the last two
weeks, which raised the liquidity in the banking system. ICICI Bank
has been hammered in the past before seeing a sharp bounce to the
current levels. The stock has piled up heavy short positions in this
series. Upsides from current levels may lead to short covering.
Buy ICICI Bank 400 call option @ 23-25; Stop Loss: 18; Target:
35-38; Time Frame: 5-7 Days