Here's why Amit Gupta picks NTPC, Power Grid Corporation

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26 Aug, 2025 12:21

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Amit Gupta of ICICIdirect told CNBC-TV18, "The underperforming stocks have started seeing the short closer in them. In the last few series, we were seeing that the short positions were getting rolled. Now particularly in NTPC and stocks like Bajaj Auto, we were seeing that these short positions were getting rolled. Now what we are observing is that the short closer has already started, could be because of this P-notes news which has recently come in and they have to unwind the positions possibly by the July expiry."

"In NTPC, the Rs 155-160 range for the last five or six months, even though Nifty had seen some intermediate declines, remained in that range. I understand the fact that it did not move up but the delivery pickup recently around Rs 155-158 has been really encouraging and the Call writers so far which were very active, they have already started closing their positions. Now this activity was there at 160 Call. It has already closed above that level," he said.

"So, my sense is some momentum the stock can pick up and because the implied volatility (IV) is very low, that is where the premiums in NTPC Call options are still very low. So, it is an opportunity to buy the Call options of this stock for this particular series and that is why we are buying 165 Call options which is somewhere around Rs 1.8-2. So, you buy this, look for a target of Rs 6 in this particular expiry. So that is where we are buying the underperforming stocks by buying the Call options," he added.

"In the power space Power Grid is one stock which has remained near the life highs. However, now we have already seen that in 4-5 months Power Gird has remained near Rs 200-210 levels. The peculiar nature of the stock gives good volume setup and then it consolidates above that level. So, that happened at Rs 200 and that is now happening at Rs 210. My gut feeling is, the stock is likely to move towards Rs 224-226 kind of levels very soon."

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Amit Gupta

Head of Derivative|ICICIdirect

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"Looking at the futures positions where at these levels people try to go short, now they are unwinding their positions. Already we have seen 25 percent of short closer in this when it moved from Rs 208 to Rs 211-212 levels. So, I think the particular closer of positions in future segment can give some momentum to this stock also and it can move higher."