The latest analysis and commentary by stock market guru Amit Gupta of ICICI Direct on what is moving the markets today. Check out his top stock recommendations.
He spoke at length about Larsen and Toubro (L&T) and UltraTech Cement.
“One is the pair trade which we are giving our clients today which is long L&T and short Nifty. Idea being that L&T is going to outperform the index and we are going to get some alpha now from this particular strategy. The open interest (OI) in the stock has come down significantly and this is the reason that shorts have been covered. It was not able to take out Rs 1,350 levels from the month of February. So since the starting of 2018, it was facing hurdle near this level, now it is above this and during this process, almost 38 percent of closure in OI we have seen in this stock, which is a clear sign that now the shorts are going out from the stock and it is at a scenario where the downsides maybe limited and when the market is stable, you will see much higher returns in this particular stock,” he said.
“We are recommending to buy UltraTech Cement. It has started the series with 10 percent lower open interest (OI). So I think in the cement, possibly some base formation may happen. UltraTech has already moved from Rs 3,300 to Rs 4,000. The problem is, it is not taking out Rs 4,050 but our sense is this base case scenario is maybe around Rs 3,700-3,800, which should be utilised as a buying opportunity. My sense is it can move towards Rs 4,000-4,050 in the coming days so another 200 points of upside you can play in this stock,” he added.
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