Pre Market Report, August 22, 2019 | Stocks and Commodities

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.