Short IOC at current level, says Aashish Tater

Aashish Tater, Head of Research of Fortunewizard.com told CNBC-TV18, "We picked Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation (IOC) in the last month considering that almost everything negative was factored into the stock and that HPCL tested Rs 205, all the targets of BPCL, IOC has completed."

He further added, "Now what we see is there will be some supply overhang because of that FPO roadshow. If you see government is giving guidance of approximately Rs 4,500 to Rs 5,000 crore of mop up, it is Rs 53,000 crore. So whatever comes by, we feel there will be overhang on IOC stock for next 30 days. So from next 30 days we are advising to sell calls of Rs 220 and 230, which will fetch you roughly around Rs 8-10 and we expect the stock to stabilise somewhere around Rs 195-200 just before the FPO process begins. So that will create Rs 20-25 arbitrage opportunity for people at current levels."
"It is slightly a longer-term sell considering that people are looking to make money on shorts on day-to-day basis but this will give you roughly 10 percent from current levels and below Rs 215 chart goes very weak on the stock. So, combining both the things, we feel this is a good safe short at current levels." Disclosure: Safe to assume stocks discussed may have been recommended to clients.