Sell IDBI Bank, Apollo Tyres Today: Sanjeev Bhasin

Indian stock markets staged a strong short covering rally on Tuesday as the Nifty closed near 7,750. The Reserve Bank's action of leaving rates unchanged, but cutting the statutory liquidity ratio by 50 basis points went down well with investors.

Today, markets will have to contend with weak global cues as tensions between Russia and Ukraine resurfaced, leading to correction in global markets.

The concerted weakness in oil prices is slowly but surely improving the Indian macro position considerably. However, foreign flows will be proxy to global cues and could slowdown impacting liquidity in domestic stocks. However, rupee strengthening could aid sentiments and may attract overseas funds.

The following ideas may do well today,

Longs:

Buy ICICI Bank: 1476, stop loss 1448, target 1530

Buy Union Bank: 196, stop loss 192, target 216

Shorts:

Sell IDBI Bank: 91.5, stop loss 94, target 86

Sell Apollo Tyres: 185, stop loss 190, target 172

We are also carrying forward our option strategy as under:

Option strategy for Bank Nifty (short strangle): Sell 15,500 bank nifty call at 275, sell 15,000 bank nifty put at 200. Total premium earned 475. Look to book profits around 250 and stop loss at 600. Investors will lose only if the bank nifty trades below 14,525 or above 15,975.