Buy Power Grid Corp 150 call: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "We are moving towards Budget and it is possible that some stock specific moves in the stocks which are going to be benefited from any announcement in Budget are likely to move up. In Power Grid – the FIIs interest has been too much and that is why the limit has been hit especially in the cash segment. If you look at particular stocks where the limit is hit by FIIs in the cash, their interest has come into stock futures. We saw the same pattern in HDFC Bank before, where the open interest was climbing higher. The same thing happened in Power Grid, where the FIIs decided to buy the stock Futures when the announcement came but if you look at the other category of the market, they started shorting this stock and it came down from Rs 150 to Rs 135-134. Around 92 percent of open interest was added in that particular fall but now we are observing that once it has formed support again at Rs 140, around 30-35 percent of open interest has been closed. So that is a clear short covering trend which has panned out in this."

"One important feature that goes with the stock is higher bottom formation. In the last four or five months - because we saw that in the month of June it made a bottom at Rs 120, in August around Rs 127 and then in this December around Rs 130, so, possibly in this pullback it seems that the bottom possibly has been formed around Rs 138-140 in the stock and looking at the short covering trend we need to look at 150 Call option, 150 Call option has been the highest and it is trading at Rs 2 right now," he said.

"Towards expiry you may see some closure in this particular Call open interest and that is why the premium may escalate. So what is happening in Future, may pan out in the Call option also. Therefore, I recommend going long in 150 Call option in the stock and lets be hopeful that towards expiry some premium escalation may be seen in it."