Friday, 23 August 2019

Pre Market Report, August 23, 2019

August 23, 2019
Time: 8 am

Pre Market Report:

  1. Yesterday was the worst day, market cap wiped out by more than 2 lakh crores.
  2. Thanks to CEA comment, "Profit is for private and loss is for public?"
  3. He conveniently forgot whenever there is profit in Crude oil, Govt takes the profit by increasing duty but whenever there is a loss, it is passed on to common man consumer.
  4. Power Minister and Railway Minister are talking but Finance Minister is busy travelling to small cities like Mysuru to understand the "Problems"
  5. The message from Govt is loud and clear, there will be no meaningful stimulus.
  6. Even if there is some small stimulus, it will be surely too late, too little.
  7. None of the strategies working except shorting on intraday recovery.
  8. Swing low was broken, breaking all technicals.
  9. Today morning all Asian markets are higher but SGX Nifty is in Red.
  10. People who are just selling Call options making good money.
  11. I have Nifty 11000 short straddle in October and December.
  12. While December straddle still ended with few rupees profit, October straddle has given some loss.
  13. Today evening Fed chairman's comment will decide the direction of US markets next week.
  14. But going by the history, he is likely to disappoint the markets.
  15. Over the weekend, if there is no news about any stimulus, which is unlikely, our markets will come under more selling pressure next week.
  16. Due to significant fall in last one months, even a small selling will bring the market down as everyone is afraid of buying.
  17. Until yesterday Nifty 11000PE had highest open interest and that has changed in one day.
  18. Bank Nifty fell more than 700 points intraday, HDFC Bank and Kotak Bank which were holding the day before, came under severe selling pressure.
  19. Unless LIC enters the market and buy aggressively, market will not recover.
  20. However there may be some sharp upside move towards the end of the day as traders will like to square off their short trades ahead of week end holidays.
  21. In case, if there is any announcement by Govt or Fed, markets may open gap up on Monday.
  22. If Nifty does not close above 10800, I will look to add some short positions.
  23. Taking short positions at this point of time is very risky.
  24. However, we can always sell Call options.
  25. Yesterday I sold 10800CE in September and 11000CE in October both around Rs 230.
  26. The reason, now 11000 will be the first strong resistance and 11200 which is above 200DMA will be the second strong resistance.
  27. In case if Nifty crosses 10800, then will sell 10800PE is September and will convert that into "short straddle", same thing for 11000CE.
  28. If the markets continue to be weak, then just enjoy the profit.
  29. Now watch for 10800, 11000, 11200 for the next few weeks.
  30. Markets may tarde sideways in the first half and likely to make a sharp move in the last one hour, hope it is not on the downside.
  31. It will be good if everyone keep quiet, in case if anybody speaks on behalf of Govt, then that sharp move can come on the downside.

Thursday, 22 August 2019

Pre Market Report, August 22, 2019

August 22, 2019
Time: 8 am

Pre Market Report:

  1. Yesterday it was a disappointing day for our markets.
  2. When entire Global markets were positive, we sold off.
  3. Every small recovery was sold into yesterday.
  4. At the end of the day FIIs have sold for Rs 770 crores.
  5. But DIIs bought for around half of that at Rs 353 crores.
  6. Markets are not going to see any recovery until there is some concrete action from the Govt.
  7. People who are talking in favor of Govt say "How to come out with Fiscal stimulus when tax collections are not good"
  8. But this adamant behavior wrt FPI surcharge could have been avoided.
  9. Govt wanted few hundred crores and FIIs keep selling for thousands of crores and market cap falling lakhs of crores.
  10. Still Govt is just talking with sugar coated words, no firm timeline for action.
  11. When FIIs wanted you to listen, you did not listen, now they do not want to listen to you.
  12. Coming to today's trade, market set up looks very bad.
  13. Max Pain for Nifty is at 11000 and Bank Nifty is at 27800.
  14. Huge OI added at Nifty 11000CE yesterday.
  15. Along with Max Pain, this Nifty 11000 will act as a huge resistance.
  16. At least in the first half of the session, Nifty will trade below 11000.
  17. There was unwinding in Nifty 11000PE.
  18. In Bank Nifty OI added at 27800, 27900, 28000CEs. 
  19. Bank Nifty 28000CE has the highest OI and that will act as a huge resistance.
  20. There was unwinding in 28000, 27900, 27800, 27700PEs.
  21. So overall market set up is not looking bullish.
  22. However, only during this kind of market set up, some operators will move the markets upside down.
  23. One has to be very careful in the afternoon. Some operators may use some paid channels to make some source based announcements.
  24.  'SEBI overhauls FPI norms' may have come to late and too little.
  25. Any intraday recovery will be sold into. But if any short covering comes after 2.30 pm, it will be very violent.
  26. One day before lat week expiry, on August 13, Nifty future closed at 10925.
  27. But last expiry Nifty closed above 11000, at 11028.
  28. I do not know whether same thing can happen today.
  29. If Nifty is not reclaiming 11000 by the end of today, then it is going to be very bad.
  30. Nifty may even break the swing low in the coming days.
  31. I am expecting 250 to 300 points move in Nifty in the next one week.
  32. If Nifty is not reclaiming 11000, then that move can happen on the downside.
  33. On the other hand, if Nifty reclaims 11000, and if there is some announcement over the weekend regarding stimulus or taxation part, then that move can happen on the higher side.
  34. So we just take on the market on day to day basis.
  35. I am holding Nifty October 11000 short straddle and December Nifty 11000 short straddle.
  36. Both are doing well despite huge volatility in markets.
  37. For today's expiry I sold Nifty 11050CE and Bank Nifty 28000CE, 28100CE, 28200CE.
  38. If markets open flat with 20, 30 points plus or minus, then there will be some profit and can put SL.
  39. Many Asian markets are down but that is irrelevant for us now.
  40. One good thing yesterday is that HDFC Bank and Kotak Bank did not fall.
  41. Bank Nifty fall came because of PSU Banks, IndusInd, YES, ICICI Bank and Axis bank.
  42. Even in US, HDFC Bank ADR closed in Green.
  43. So expect violent moves today. 
  44. I am planning to buy some puts and finance it by selling some calls, to make some money in case if markets crashes in the last one hour.
  45. Nifty future should take support at 10880, resistance will be at 11020. This may be valid ionly until 2.30 pm.
  46. If DIIs wish, they can induce a short covering rally towards the end.

Wednesday, 21 August 2019

Pre Market Report, August 21, 2019

August 21, 2019
Time: 8 am

Pre Market Report:

  1. Yesterday our markets were highly volatile.
  2. One more scam broke out CG Power.
  3. Scams and Bankruptcies are new normal now.
  4. YES Bank crashed once again as it holds CG power shares.
  5. FIIs keep selling since budget day.
  6. DIIs coming and supporting markets whenever there is a big fall.
  7. That creates huge volatility.
  8. Selling comes in index heavyweights like HDFC, HDFC Bank, Kotak Bank, Reliance, etc.
  9. US markets closed lower.
  10. ut Asian markets are recovering from lows.
  11. And US futures are trying to stay in Green.
  12. SGX Nifty traded below 11000, now trading slightly above 11000.
  13. Markets are likely to be highly volatile, as usual.
  14. But Nifty has been trading between 10800 and 11200 for most part of this series.
  15. As long as there is no stimulus announcement, Nifty is likely to trade in this range only.
  16. FIIs keep selling since budget day, only 2 days, due to HDFC AMC share sale and MGL share sale days, FII was on buy side.
  17. In those two days also, FIIs are net sellers, as the sellers of HDFC AMC and MGL are classified as FDI.
  18. Otherwise for last one and half months, FIIs keep selling.
  19. Yesterday some short covering was seen, Nifty future gained some premium while it was trading at discount the day before.
  20. So we can expect some short covering if Nifty future trades below 11000.
  21. Rupee keeps depreciating, worst performing Asian currency in the last one month.
  22. So IT stocks are doing well while Banking stocks are falling.
  23. Markets are likely to be in range bound this week.
  24. If any stimulus announcement, it may come during the weekend.
  25. On any intraday rise of more than 100 point in Nifty, consider selling October 11200CE.
  26. On any fall of more than 100 points, consider squaring up positions.
  27. Low risk takers, do Nifty 11000 short straddle in weekly and long straddle in monthly.
  28. Had you done this day before yesterday, you would have made Rs 20 profit yesterday as there was a gain of Rs 40 in short straddle and loss of Rs 20 in long straddle.
  29. Reliance is showing some weakness after huge gap up after AGM.
  30. I sold 11200CE day before yesterday around closing time at rs 21, yesterday closed at Rs 10.
  31. Today around closing time, will sell more 11200CE if Nifty future closes below 11100.
  32. Bank Nifty facing stiff resistance around 28500.
  33. So will look to sell 28500CE in Bank Nifty also.
  34. Once again expect a high volatile market.
  35. Nifty future may trade between 10980 and 11120.

Tuesday, 20 August 2019

Pre Market Report, August 20, 2019

August 20, 2019
Time: 7.40 am

Pre Market Report:

  1. Yesterday could not write "Pre Market Report" as I was travelling from Bali to Singapore.
  2. Yesterday markets opened higher and traded well above 11100.
  3. Suddenly in the afternoon selling came and Nifty fell more than 120 points.
  4. We opened higher due to Global cues and DII support.
  5. But on Friday FIIs had sold for more than Rs 1300 crores.
  6. There was no positive news from stimulus front over the weekend.
  7. That triggered profit booking once Nifty future touched 11150.
  8. Kotak Bank, HDFC Bank came under good selling pressure, Bank Nifty lost more than 350 points from intraday high.
  9. Yesterday was the best day for bulls to touch at least 200DMA, but they failed miserably.
  10. We are struggling while Global cues are so good.
  11. What will happen if Global cues turn bad?
  12. US markets closed higher.
  13. But Asian markets are mixed.
  14. Now German is talking (not only talking) about Fiscal stimulus.
  15. Yesterday FIIs have sold for about Rs 300 crores while DIIs have bought for similar amount.
  16. NBFCs and HFC will be in focus today s RBI has done away with Debenture Redemption Reserves.
  17. HDFC has been moving violently in this series.
  18. DTC recommendations submitted to FM but not made public.
  19. As usual medias are telling whatever they like in the name of "sources"
  20. Here and there some news comes from Govt as well as RBI regarding the Economy.
  21. So we can expect some stimulus announcement in the next few days.
  22. But if markets are not happy with the terms of the stimulus, that is when the real selling will come.
  23. So if there is any gap up on stimulus news, that will be the time to lighten the long positions.
  24. Today as long as 11000 is not broken, we can expect some recovery.
  25. There are two reasons for expectation of recovery.
  26. One, FII selling of Rs 300 crore plus is not a big selling.
  27. Second, short sellers will like to book profits on any fall as Stimulus announcement may come anytime.
  28. In the last few days, the tone is changing.
  29. Yesterday FM said corporate tax will be cut to 25% gradually and will support the "wealth creators"
  30. One week before she said, "We will cut corporate tax to 25% (only) as and when GST collections are robust.
  31. Yesterday RBI said it will not allow any NBFC to collapse.
  32. Yesterday they have done away with Debenture Redemption Reserve.
  33. These are indications that Stimulus is not far away from here.
  34. One can consider the strategy: +1X11000CE and -1X11100CE.
  35. Maximum loss will be Rs 3750 and that will be when Nifty expires below 11000.
  36. Maximum profit will also be Rs 3750 and that will happen when Nifty expires above 11100.
  37. If there is any stimulus during this week or during weekend, next week markets may move higher.
  38. Anyway the target of 11100 is not far away from here, the target may be achieved even without stimulus, if Global cues are good.
  39. You can sell some CEs in this weekly expiry if you want to reduce the cost of buying 11000CE.
  40. Drone attack in Saudi making Oil prices jittery.
  41. UP Govt has increased taxes on Petrol and Diesel.
  42. OMCs are not going to recover anytime soon.
  43. Right now markets are consolidating.
  44. Bulls will win only above 200DMA around 11180.
  45. Today Nifty future may take support around 11000.
  46. Resistance will be around yesterday's high.

Friday, 16 August 2019

Pre Market Report, August 16, 2019

August 16, 2019
Time: 8.10 am

Pre Market Report:

  1. On Wednesday SGX Nifty was trading around 10920 just before our market open.
  2. Buy in Pre Market itself, Nifty was very strong.
  3. Nifty future opened at 10999, Open and High was same for first hour.
  4. Once that high was broken, Nifty future hit 11099.
  5. That was about 180 points higher than what SGX Nifty indicated.
  6. Then towards the end, again Nifty future fell to 11020.
  7. Last one hour was very volatile due to expiry.
  8. On Wednesday night DOW fell 800 points, worst fall of the year.
  9. That is due to yield curve inversion, seen as precursor for Economic Recession.
  10. After that biggest fall, Trump tweeted positive about China Trade war.
  11. Markets recovered slightly after this positive tweet.
  12. But yesterday evening, China said Trump's 10% tariff hike is against the agreement.
  13. HK unrest or US-China Trade War, Yield Curve Inversion, Indian Govt inaction towards Economic Slow down, nothing seems to be subsiding now.
  14.  To add fuel to fire, Economic data that came form China and Germany are not good.
  15. Yesterday HK markets shot up more than 2% from intraday low when Fiscal Stimulus news broke out.
  16. Yesterday PM reportedly met FM to asses the Economic situation.
  17. But people still believe that Govt is trying to stabilise the markets with soothing words instead of any concrete action.
  18. N Sitaraman has become most in famous FM.
  19. Auto sales at 20 year low, she announces registration fee hike.
  20. CCD promoter commits suicide, she announces Jail term for not spending CSR.
  21. Stock markets are down, she announces Share buyback tax, 35% minimum share holding.
  22. FPI sentiment has been very bad, she announces Super Rich Surcharge.
  23. OMCs were asked to ta take Rs 1 per litre burden when Crude hit $80, now Crude is down below $60 but she increase the excise duty to keep herself. OMC prices have never crossed the figure prior to Rs 1 burden.
  24. Lakhs and lakhs of people losing jobs in Auto sector, Tata Motors had to stop production for 3 times in August alone, hundreds of Dealers closing the shops, but still no action.
  25. GST Council has not been informed of any agenda. A news paper report says PM is considering reducing GST for autos. Reducing the GST is done by GST council, not PM.
  26. SGX Nifty now trading around 10940 which is about 90 points gap down.
  27. This is happening at a time when all news papers report that Pm and FM are working towards Economic Revival package.
  28. That shows clearly markets are not approving what Govt does.
  29. Once again DIIs will try hard to keep the markets.
  30. Market feels that this Govt is running through news papers.
  31. Few days before one news paper reported that DTC (Direct Tax Code) is taken immediately, then there was no news about it.
  32. Congress did bad to Kashmir and did good for rest of the country, now BJP has done good for Kashmir and bad for rest of the country.
  33. Unless some official announcement comes, markets are not going to believe anything.
  34. In the past also Economic Times reported that Govt considering relief for FPI surcharge but that did not happen.
  35. All these will make markets very volatile. Will global cues drag down our market or PM review of Economic situation will trigger relief rally?
  36. Difficult to predict as of now.
  37. But Asian markets are recovering from lows.
  38. Even Dow futures are trading higher than yesterday's high.
  39. Let us see how our market performs today.
  40. Let me refrain from predicting Nifty range today.
  41. But one thing I am sure, there will be 500 point up move or down move in the next few weeks.

Wednesday, 14 August 2019

Pre Market Report, August 14, 2019

August 14, 2019
Time: 7.50 am

Pre Market Report:

  1. Yesterday our markets were highly volatile.
  2. Nifty fell 100 points then shot up 100 points then fell 200 points.
  3. Bank Nifty future fell about 800 points.
  4. Nifty future came to discount.
  5. H2B2 shares came under severe selling pressure.
  6. On Friday no positive outcome came from FPI meeting with FM.
  7. That could be a main reason for this kind of selling in all FII concentrated stocks.
  8. But at the end of the day FIIs have sold just for Rs 600 crores.
  9. This kind of fall is not warranted for such a small selling.
  10. But DIIs did not match the selling of FIIs.
  11. That could be one reason for market fall as there are no buyers.
  12. Later in the day, Trump announced postponing tariff hike for some goods from China.
  13. Then US markets shot up.
  14. Today morning Asian markets opened firmly in Green.
  15. But some markets like Japan, Australia gave up half of the gains already.
  16. Hong Kong is up just 300 points despite air port problem has disappeared.
  17. SGX Nifty is not making any headway.
  18. Govt operationalised the partial credit guarantee scheme for NBFCs and HFC.
  19. There was a news report in Economic Times that Govt is working on stimulus package.
  20. According to that report, revisit of FPI surcharge, Dividend Distribution tax, LTCG, Tax on share buyback, etc are considered.
  21. Day before yesterday I sold 11300CE in Nifty. Yesterday sold 11100, 11050CEs.
  22. Day before yesterday sold 27500PE in Bank Nifty at Rs 35, got out at Rs 20 as SL triggered.
  23. One day before you can sell OTM call options, most of the time markets will open moderately higher or lower and consolidate and big move will come only after 2.30 pm.
  24. Yesterday I sold even 11000CE at Rs 20 in some accounts in last few minutes.
  25. It closed at Rs 11, will put SL at Rs 20 as soon as markets open today.
  26. SGX Nifty is not even up by 20 points.
  27. But SGX Nifty has not been an indication for the last few weeks.
  28. My Gut feeling says that there will be some short covering and Nifty may expire above 11000.
  29. Reliance will have to watched keenly, yesterday's rise was due to short covering, what is going to happen after short covering is over?
  30. Is it going to stabilise or fall a little bit.
  31. If it falls, that will dent the sentiment in overall market.
  32. Saudi Aramco deal could have been engineered by Govt.
  33. There are multiple benefits for Govt. (1) Large amount of money will be paid back by RIL to banks and that will help banks to lend more to others. (2) At a time when Pakistan is playing muslim cards in Kashmir issue, Middle East strategic relation is good for India.
  34. Yesterday Auto stocks and Banking stocks came under severe selling pressure.
  35. Motherson Sumi fell 9% after results. Bharat Forge also fell significantly.
  36. These two are the darlings of midcap rally few years before.
  37. Global tensions make Yen more expensive, Yen shot up about 8% in last few weeks, as Maruti pays royalty to Suzuki in Yen, Maruti fell more than other Auto stocks.
  38. H2B2 shares fell as FPI meeting with FM did not give any positive indication.
  39. Just now Economic data that came from China has not been good, very bad.
  40. Industrial production came much below expectation.
  41. We can expect markets to open slightly higher and volatility will rule the market.
  42. Ahead of holiday, there will be some sharp move in markets towards the end of the day.
  43. Will be happy if that sharp move is on the higher side.
  44.  Yesterday my prediction has gone terribly wrong as I was focusing only on Global cues.
  45. Today Nifty future is likely to trade between 10900 and 11000 in the first half and last few hours difficult to predict.

Tuesday, 13 August 2019

Pre Market Report, August 13, 2019

August 13, 2019
Time: 8.15 am

Pre Market Report:

  1. One day holiday, many things happened both locally and globally.
  2. First local issues, PM's interview is a positive surprise.
  3. He has assured that Govt will do everything possible to bring growth.
  4. RIL AGM was even more surprising.
  5. Everyone who talk against Reliance talk about its huge debt.
  6. Now RIL says it will become zero debt company.
  7. Saudi Aramco buying 20% stake in petrochem division for US$16 billion.
  8. If that comes through it is not only good for Reliance, also good for banks as this money will be going back to banking system.
  9. People expect Reliance to go up 4 to 5% in today's trade.
  10. Whether it will sustain of will come under selling pressure at higher level is a big question.
  11. Now coming to global cues.
  12. Everything was well until yesterday afternoon.
  13. After RIL AGM, SGX Nifty hit a high of 11172.
  14. Then came the news that Hong Kong protesters stormed air port and air port operations were cancelled.
  15. A Chinese official comment about protesters as terrorists triggered speculation that Hong Kong will see a repeat 1989 Tiananmen Square.
  16. Immediately world markets fell and SGX Nifty fell more than 100 points.
  17. But nothing bad has happened as people started moving out of air port for the same fear.
  18. Now Hong Kong markets are down by about 300 to 400 points while its futures were trading more than 500 points lower earlier.
  19. Argentina elections added fuel to fire.
  20. Argentine stocks fell 48% in single day.
  21. That is likely to affect other emerging currencies also.
  22. In July we did not follow global cues and there is no reason for us to follow global cues now.
  23. SGX Nifty has not been a good indicator for the last few weeks.
  24. Nifty future corrected after hitting a high of 11186.
  25. That is likely to act as a resistance now.
  26. We have only 2 trading sessions for this expiry.
  27. Markets may wait t hear PM on August 15.
  28. So there may not be a significant move in the next two days.
  29. One good thing is that FIIs have stopped selling in Cash market.
  30. They have bought for more than Rs 200 crores in Cash market.
  31. We have to see how they react today, if they continue to buy, we can expect a rally towards 11500 in the next few weeks.
  32. On Friday I sold Nifty 11300CE at Rs 20, Bank Nifty 29000CE at Rs 60, Bank Nifty 27500PE at Rs 26, all weekly expiry.
  33. Other strategies I have updated in Twitter.
  34. If 11180 is crossed in Nifty future, then one may buy 11200CE and sell 2X11400CE.
  35. If 11180 is not crossed until the end of the day, then one can buy 11200CE and sell 2X11350CE.
  36. We can expect some announcements from Govt side next week after Aug 15 speeh by PM.
  37. Even when Nifty was below 11000, Nifty 11000PE had the highest OI.
  38. On Friday morning I suggested selling 10800PE, I sold it at Rs 60. Now it is trading at Rs 53, Rs 60 can be kept as a SL.
  39. Saudi Aramco stated that the talk is at initial stage, do not know how much market will believe RIL stake sale.
  40. If market believes then it is good for banks also.
  41. Nifty future may trade between 11080 and 11200.