Pick SBI, Federal Bank, Asian Paints, Petronet LNG: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "There are pockets in Bank Nifty which are looking little weak for a very short term scenario. For example, State Bank of India's (SBI) results were not that kind of great for what the market was expecting. So, a little weaker, in that case what we have observed is the call writing is that around Rs 290 levels which has already started. In futures day before yesterday’s session when the market was a little fine and recovering, this stock was under pressure and there was addition of around 2-3 percent on the short side. So, we are recommending writing 290 Call option of SBI which will be somewhere around Rs 3.5-4 of premium for this particular series and for the PSU banking I think some more consolidation is likely."

"Federal Bank has recovered in the last couple of sessions, I think it will be very difficult for the stock to move beyond Rs 115 levels. The kind of positions we have there, it is slightly on the short side. So, the premium of around Rs 1.2-1.5 for the Call options around 115 strike can be written. So, these are two stocks we are picking on the short side particularly and we are writing the Call for this."

"We need to look at certain stocks which we have remained resilient so far and the leverage is also not very high because it is dangerous. In the current market parlance if the leverage is high, we can see liquidation, but that is not there in certain stocks. For example, if you look at Pidilite Industries, Asian Paints, or Petronet LNG, I think these stocks are looking fine from that perspective. In fact, there is more short covering which is panning out in these stocks. For example, Pidilite after the results, came down to Rs 780, now it is recovering above Rs 800. I think Rs 800 will remain a good support and it should move towards Rs 837 levels," he added.

"Asian Paints, I think it has formed a good base because 1,100 Put for the last two or three series has remained the highest. Whenever it falls, it recovers from those levels. It is just a matter of time when it will recover above Rs 1,200 levels. So we are punting on this that towards this particular series expiry also, it can see some kind of move on the higher side. So, we can start buying this stock. In the last session, around 5-6 percent of short closer was seen in this particular stock."

"Third one is from oil & gas space because I think there are few pockets in oil & gas which are performing, particularly the gas stocks. We saw how Indraprastha Gas has performed. I think Petronet which remains subdued because of the Qatar news, now nothing significant is panning out so far from that perspective from the Qatar end. So, I think the short covering is there now in the stock which can pan out. The level of Rs 205 was a very good support after being ex-bonus, that was a good support level and now it is recovering. It closed near Rs 218-219. So, we are looking for a target of Rs 237 in the stock on the higher side,"  he said.