The Union Budget is just around the corner, with Finance Minister Nirmala Sitharaman scheduled to present it on July 23, marking the first budget after the 2024 elections.
The full Budget 2024 comes against the backdrop of markets firing on all cylinders, with equity benchmarks Sensex and Nifty trading near record highs.
In anticipation of the budget, traders are scouting for stocks that could perform well on Budget Day. Here are some potential picks to consider:
Lichsgfin (LIC Housing Finance), NTPC (National Thermal Power Corporation), and BEL (Bharat Electronics Limited) are the top picks of Soni Patnaik, Assistant Vice President of Derivative Research at JM Financial.
Pre-Budget Trade Setup and Strategy Recommended by Patnaik
LIC Housing Finance (LIC Housing Finance)
Option Strategy: July Series Bull Call Spread
Trade Details: Buy 820 Call Option at Rs. 15 and
Sell 850 Call Option at Rs. 8.5 (1:1 ratio) Premium Outflow: Rs. 6.5 (maximum risk) Targets: Aim for 15 points in total premium, targeting 860 with a stop loss at 760. Rationale: After reaching highs around 820 levels, the stock saw profit booking down to the 770/760 range, consolidating and showing strength. The recent closure above 800 and aggressive short covering indicate a positive outlook.
National Thermal Power Corporation (NTPC)
Strategy: Bull Call Spread for July Series
Trade Details: Buy 390 Call Option at Rs. 5 and
Sell 410 Call Option at Rs. 1.5 (1:1 ratio) Premium Outflow: Rs. 3.5 (maximum risk/stop loss) Targets: Aim for 10-12 points in premium, targeting 410/425 with a stop loss at 360. Rationale: Recent aggressive short covering and strong support around 370-365, coupled with an intraday chart breakout, suggest potential for levels above 400 in the near term.
Bharat Electronics Limited (BEL)
Strategy: Buy 330 Call Option at Rs. 10.5 and
Sell 350 Call Option at Rs. 4.5 (1:1 ratio)
Premium Outflow: Rs. 6 (maximum risk/stop loss) Targets: Aim for 10/12 points in total premium, targeting 360/370 with a stop loss at 300. Rationale: Continuing above the breakout of 300 plus, the stock has consolidated around this level, gathering momentum for a fresh breakout above 340.
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