Buy Cipla 680 Call, should move higher: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "Better results are expected from Cipla this time and if you see the move now, there was a sharp move and then it remained sideways. On October 20, there was some adverse news flow and the stock came down but at lower levels of Rs 650-660, we have seen very high delivery pickup in the stock. If we look at the volumes, it was almost two to three months high." "It means that the buying support has come back into the stock and if you look at the open interest positions, there has been continuous closure. If you look at the last two or three series, when it fell from Rs 750 to Rs 650, almost 65 percent of short additions was seen out of which 45-48 percent has already fizzled out. So, it means that the short covering trend is panning out in the stock and it is possible that towards the result announcement it should move higher," he said. "Looking at yesterday’s very late move in Cipla on the higher side, it started picking up. I think the Call options can be looked at for couple of days now. So, we are picking 680 Call option to buy because that was the noticeable high Call base. So, I expect some short covering to happen in that Call. So, the premiums will pick up very soon. I think from the current level of Rs 6-7, it should move to Rs 14-15. So, one can buy the 680 Call option of Cipla for another couple of sessions of October series," he added.