Short Colgate, L&T should move towards Rs 1,670: Amit Gupta

Amit Gupta of ICICIdirect told CNBC-TV18, "Some profitable trades in the market are getting closed, we saw that in the last 200 points of fall in the market when we saw the profit booking in the pharmaceutical space and also in yesterday's session it was the fast moving consumer goods (FMCG) pack. Now when the heavyweights are under pressure because when the Nifty was surging, we didn’t see that kind of move in ITC or in Hindustan Unilever (HUL) and that is why other stocks were under pressure.""Colgate Palmolive since the last quarterly results because of the sales growth did not pick up that much of what the market was expecting. So we have seen that there has been a continuous liquidation of long positions. Now 125 percent of long positions were built up in the last four-five months when the stock was trading around Rs 950 but when it started coming down and did not perform, the continuous liquidation is there and already 40 percent of closure have been seen out of those positions. Yesterday it was down till Rs 1,800. I think Rs 1,700 kind of levels can still be seen in this particular stock. So if you are looking for some shorting opportunities, these may be some names where possibly you can go short," he said."In Larsen and Toubro (L&T), yesterday there was 1-2 percent closure of positions. One particular feature is that if you look at the fall from Rs 1,600 to Rs 1,500, 1,600 Put writers did not close their positions at all. The open interest (OI) did not see the close. Around 1,000 contracts were there in 1,600 Put strike and we did not see any closure in 100 points of fall. Now once the stock is around Rs 1,560-1,565, the money strike of 1,600 Put is the highest. That is why it should take out 1,600 strike or levels on the higher side and should move towards Rs 1,650-1,670," he added.He further said, "The future OI is already getting closed in L&T. People were going short in the stock in the last breakdown level, below the breakdown level of Rs 1,750 because of the lower crude prices because people of the lesser order book from the Middle East. That is why OI of around 60-70 percent has piled up in this in future segment, some of which may get closed in this particular momentum of the market."