Buy LIC Housing on declines, Union Bank 130 Call: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "LIC Housing Finance has been the sector leader but when you look at the other non-banking finance companies (NBFCs) stocks, they have run up very significantly. However, it remained a laggard. Now I think overall if you look at the range for the stock for the last one year, it remained in the range of Rs 430-500 levels. It is heading towards Rs 600, so that remains the target. It can breach Rs 650 also because the kind of short blocks we had in futures around Rs 500 levels and the time it took to take out those short blocks, I think the moment it is out, you will see a significant short covering trend in the stock.""LIC Housing has already run up to Rs 550, I think any decline towards Rs 540-545 can be utilised as a buying opportunity. Look for target of Rs 600 or beyond. If you look at the delivery buying which has happened around Rs 520, I don’t think this stock is coming below Rs 520. Your stop loss should be placed around Rs 525. So, that may be a decent trade on the long side," he added. "Union Bank of India, particularly after the recent set of results from the PSU banking space, from State Bank of India (SBI) or Bank of India (BoI), we saw that two or three stocks have taken out their highest call basis. So, whenever such thing happens and we are moving towards expiry the momentum comes back into those particular stocks and the same thing has happened with the SBI when it took out Rs 240. It was the same in Bank of India as well.""Union Bank is a third candidate from this space which had not given that kind of positive results but now it is above the second highest Call base of Rs 130. So writers of these call positions should become vulnerable and that is why the stock should move towards Rs 140 levels." "I recommend buying 130 Call option of the August Series only. The implied volatility (IVs) have remained quite subdued in the PSU banking because the Call writers and all of these stocks have remained quite active. So, the moment you are above these strikes, I think it is a wise decision if you can buy the Call options and trade till the expiry, so you can make good money in that."