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 Asian Paints, and Petronet LNG.

Speaking about individual stocks, Gupta said, “Crude has come down. We had already seen USD 1.2 million per barrel of cut announcement, but even then crude is not moving and rather came down. So my sense is we should start looking at the users of crude. Asian Paints we are recommending to our clients. If you look at from mid of 2017, this stock has already consolidated around Rs 1,250 levels for a pretty longer period now, one and a half years. Now what is encouraging the stock is the delivery pick up. If you look at the delivery Z-score of the last quarter and the recent reading, it has increased by almost 25 percent. In fact yesterday’s delivery was also around 65 percent. So my sense is now the investors have started buying this stock and it is possible it can move beyond Rs 1,400 eventually. So our target is Rs 1,440; that is the first target. However, my sense is it can go much ahead. If you look at the futures open interest (OI), it had come down during this consolidation but now the fresh positions people have started building up. Leverage is still not very high and despite the fact it is hovering near the higher levels. So my sense is there is a lot of room for this OI to get added. Yesterday around 2 percent addition we had seen and that will give a lot of kick to the stock on the higher side.”

“From the midcap space, we have Petronet LNG. I think oil and gas overall was sluggish. We had seen a lot of stocks were down, the midcaps, the other stocks were participating from other sectors, but now because market is little stable and the short covering pattern in the midcaps is clearly seen, that is panning out in the stocks like Petronet also. This has remained resilient near Rs 200. For the last 8 months it was hitting Rs 200 levels which was a support since the mid of 2017. Now people try to go short, if you look at the OI positions, almost 35-40 percent increase we had seen in the positions because people were trying to go short. I did not breach Rs 200, rather this move has come on the higher side. Right now it is around Rs 224, so, my sense is the short covering which has started, it is not very huge yet, around 1 percent cut we saw yesterday and before that there was some cut, but my sense is this short covering may pan out more towards the December expiry. So you can remain positive in the stock. Look for a target of Rs 235 and my sense is it should not go below Rs 220 now which was the previously highest call base. Now those positions are getting closed and that is where you will get more kick on the higher side,” he added.

Disclaimer:

The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.