Buy Bank of Baroda 190 Call, advises Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "My thinking is that now Nifty is here to stay for some time. In fact in the Bank Nifty the kind of pullback we saw in yesterday’s session, which was after some days of languishing movement, we have seen that it started outperforming Nifty. I understand the fact that there are only one or two heavy weights which are outperforming the overall Bank Nifty segment right now particularly HDFC Bank which has almost gone up to the life highs and IndusInd Bank also has gone up to the life highs." "There is a huge gamete of the PSU banking space which has not performed so far but when you look at the fall from 8,000 to 7,700 before this recent pullback in the market, we didn’t see any kind of profit booking, any major profit booking in the PSU banking that time. So, first stance of resilience came from the PSU banking that time. I understand that after the 50 basis point of rate cut, they have not shown that kind of resilience. However, in the overall market also within two or three sessions at the start of this series we are near the highest Call bases. Nifty is near 8,200 which was the highest Call base," he said."Bank Nifty is now approaching towards 18,000 which is one of the highest Call base. In fact if you look at PSU banking space also, in Bank of Baroda (BoB) we have seen that 190 and 200 Call strikes are heavily written. They were heavily written in the last series also. People made money in that and that is why again they are active at these strikes. However, my thinking is that because we are approaching towards the highest Call base it is a long series and is just the starting of the series. That is why the short covering pattern may continue for one week or so," he added. "Possibly for couple of weeks we can see this short covering pattern continued till the middle of October. In that case one can buy the Call options and trade in this market, I think that may be a good strategy. So, 190 Call option of Bank of Baroda can be bought which is available close to Rs 6-7. We feel that Rs 14-15 on the higher side can be made in this."