Buy Mahindra and Mahindra 1420 Call, Vedanta 290 Call: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "For buying options because it is a long series and we have the expiry on August 31, what we have started doing is buying the Call options of certain stocks which either have been consolidating so far or are coming out of that particular consolidation. For example, Mahindra and Mahindra (M&M). Since the month of March, around Rs 1,350 it was consolidating. There was certain profit booking towards Rs 1,250 and then Rs 1,300 and then this particular series, just the last series, it reverted from Rs 1,350. So, my sense is that is a very strong support now for the stock. What is happening in the options, particularly in Call options, because it remained subdued in comparison to stocks like Maruti Suzuki and all, the Call writing was really very aggressive in 1,400 Call strike and that is seeing a closer. Yesterday also almost close to 100 contracts were closed and it closed near Rs 1,429 levels. So we are buying, 1,420 Call option now which is available near Rs 40-45 of premium and we are expecting this premium to move towards Rs 84-88 in this particular series."

"Second is from the metal pack which is Vedanta. If you compare it with the other metal stocks, it remained little subdued. It had a fall from Rs 280 to almost Rs 240-250 levels and then it just reverted. Instead if you look at the other metal stocks, they consolidated at the higher band and then they moved up further. So, in that sense, the shorts are there in Vedanta. If you look at the open interest addition, it was higher when it was falling and now obviously we are seeing the closer of these positions which will bring more beta in the stock in this particular series. So, it is advisable to buy the Call options. One can buy 290 Call options which is close to Rs 6 and I think it can move to Rs 12 also in the August series. So these two Call options for the time being we are recommending to our clients," he said.

"From the auto ancillary space it is Bosch. We have recommended for a target of Rs 25,500 to our clients, the reason being again this is one stock which had a very long consolidation if you compare with the other auto ancillary or possibly the OEM stocks. I think Rs 24,000 should remain a very strong support now because we have seen a very good consolidation near Rs 23,800 and Rs 24,000. If you look at the open interest positions, if I take it that the rollovers were very strong in the short side before, but if you see the last couple of series, these positions are coming down. So, almost 25 percent of short closer has been seen when it went till Rs 23,800 and then reverted up. So, that gives a very strong sense that this stock now is gaining momentum and it is going beyond Rs 25,000 soon. So we have a target of another 1,000 points on the higher side from here,"  he said.