Buy ICICI Bank OTM calls, says Manoj Murlidharan, IIFL Premia.
Murlidharan told CNBC-TV18, "If you specifically look into ICICI Bank this level of Rs 904 seems to be a very crucial level because even day before there was lot of short which has come in and today if you actually see it is fresh long build. We have not really seen shorts getting covered so I feel Rs 904 is definitely a level into ICICI Bank where we would see a short covering coming in so we can see somewhere at least Rs 914 to Rs 916 on that and if it is on the Nifty's front as I was saying the investors are using a lot of options so doing a call spread let us say 52-53 that gives you a ratio of around Rs 50 on your premium keeping a stop loss of Rs 35 seems conducive at this point of time. "
He further added, "We were bearish on Bank Nifty yesterday because at somewhere close to 9700- 9720 levels but if you look into Bank Nifty what it has done is actually added a good amount of long positions today and needleless to say the constitutes of Bank Nifty. As I was saying ICICI Bank at Rs 904 that happens to be privet above which we see some short covering. So that becomes a good option but I would strictly say that choosing an option would be wiser at this point of time than rather going on to the futures so I would actually go and buy out of the money call option for ICICI Bank as well as HDFC Bank ."
"My top picks apart from that would be Tata Steel . For 460 call option I guess somewhere close to Rs 18 will be another good buy because we are expecting close to around Rs 474 on the stocks as well."
