Amit Gupta, Head - Derivatives at at ICICIdirect told CNBC-TV18, "With the recent rupee depreciation, we should start looking at IT and pharma stocks because both the segments had seen the correction and they have gone into the time correction also. Therefore, we are picking up Dr Reddy's Laboratories (DRL) from pharmaceutical and HCL Technologies from IT space. In Dr Reddy's Labs, we have seen higher bottom formations and along with this there have been 41 percent of substantial short closure and we believe that eventually it should move towards Rs 3,350 kind of levels. It had moved towards Rs 3,300 then came down but again it has made the higher bottom and has started moving up. Previously it was forming a base near Rs 3,000. Now it is forming a base near Rs 3,100. Therefore, looking at the short closure positions and the accumulation at the lower levels, I believe we should remain positive in the stock."
"HCL Technologies did not fall. If you look at the recent fall, the last fall in the tech space, it has recovered above Rs 800 again. The 800 Call writers are shifting their positions to 840 or higher strikes. So my sense is the stock is eventually moving higher and we should look at buying the Call options also because when it was falling, 780-790 cash buying was seen and suddenly the Call writers were seen at Rs 800. Once it is closing above this the position, closure at 800 Call strike may be seen which can surge the premium much higher. So buying the 800 Call option is advisable from the technology space right now," he said.
"I have a buy call on Rural Electrification Corporation (REC) because in the midcap space and particularly from NBFC, when the fall came we did not see that fall into the NBFCs pertaining to the power space like REC or Power Finance Corporation (PFC), they remained near Rs 130-125 levels. In REC particularly there was a huge delivery buying near Rs 124. We saw in the month of September and then followed by October and it has not been coming below those levels now, in fact the position in Future segment almost 35 percent of short closure was seen eventually even in the jittery market when the Nifty coming down. So that bodes well for high beta midcap which is not falling now with the market, so that beta should be on the higher side now and it should move towards Rs 157 possibly in a month or so. So we remain positive in the midcap space in REC and PFC."