Amit Gupta of ICICIdirect told CNBC-TV18, "We have gone long in ITC at the lower levels also. The reason being, it is absorbing all the negativity over the period. We had seen the ban on the loose cigarettes whenever the statements have come twice before and now it has taken out the previous highs. It came down to Rs 350 but if you observe, it has been forming higher bottoms in the last five-six months. Previously the bottom was around Rs 330 then it was formed around Rs 340, that was the Budget day on July 10, when Rs 340 was formed and since then this level has not been taken out."
"Whatever negatives have come out in the stock, it has been the index heavyweight and that is why if this starts moving up, market may also get some cushion. If you observe now, the bottom has been formed much higher around Rs 350 and the stock has been moving up, Rs 370 has been the highest call based and it has closed above that level in the last session, in fact, little higher than Rs 370. So I think the short covering towards expiry is likely to come in this stock even if it is declining, that is an opportunity to buy," he said.
"If you observe the open interest (OI) in futures, people have gone long because the strong hands possibly have entered into this stock at lower levels. Around 15 percent of addition was seen in the last few sessions when the stock has started moving from Rs 350. So a long build up in futures and the clear short covering trend can pan out in 370 Call option. So I think one should look at buying the stock at declines and look for a target of around Rs 415 in the coming days."
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