Vinay Rajani of HDFC Securities recommends to buy this SBI call option

SBI has seen long-build in the November series, with a 3 per cent rise in open interest and price so far, says the technical & derivative analyst.

Derivative Stock Strategy

BUY

SBI Nov 600 Call: Rs 8.45

Stop Loss: Rs 4

Target: Rs 18

Rationale:

• The stock has seen long build up with Open Interest rising by 3 per cent, and price rise of 3 per cent in November Series
   
• The stock has witnessed a running correction in last couple of weeks. However, considering the primary uptrend, recent correction should be taken as a buying opportunity
   
• The stock is placed above all important moving averages, indicating bullish trend on all time frames 

Thus, we recommend buying SBI Nov 600 Call at CMP, for an upside target of Rs 18, keeping a Stop Loss at Rs 4.

(Vinay Rajani, Senior Technical and Derivative Research Analyst at HDFC securities. Views expressed are personal).