Premarket Report, August 29, 2013 | Stocks and Commodities

P R Sundar, Aditya Trading Solutions

August 29, 2013
Time: 7.50 pm

Premarket Report:

1. FIIs continued to sell in cash market. But in Futures and Options, they have bought about Rs 600 crores, although they sold about Rs 1200 crore in cash market. Very short term movements like intraday or a day or two are determined by F&O people than cash people. So the market will not show the panic like yesterday.
2. US markets rose yesterday, but did not close at the high point. In last one hour there was huge buying followed by huge selling. This is neither positive nor negative. This shows the indecision.
3. All the Asian stocks are trading in positive territory, particularly Indonesia. But not by huge margin. We can say selling exhausted, some short covering happening, but no buying.
4. SGX Nifty is trading about 30 points plus at 5300.
5. RBI's action will make Rupee to appreciate. In overseas markets, Rupee is trading around 67.50, an appreciation of more than a rupee.
6. LIC reportedly bought good amount of shares and that was the reason of more than 200 points swing in Nifty from the low point.
7. But expiry day movement will be very difficult to predict. It depends on net long or short in the system. Market will be very volatile.

Recommendations for Intrady:

1. Not many expiry day will begin with a round figure like 5300.
2. To day it will open around 5300, immediately after open, sell both 5200 Put option and 5400 Call option.
3. Index is likely to close between 5200 and 5400.
4. This trade is only for high risk people. If the market firmly trades above 5350, need to sell additional 5300 Put and if Nifty crosses 5380, 5400 Call will have to be closed.
5. Similarly, if Nifty trades firmly below 5250, 5300 Call will have to be sold additionally and 5200 Put will have to be closed in case if Nifty falls below 5220.

Recommendation for Next Series:

1. Sell September Expiry 4500 Put option and 5800 Call option.
2. Due to huge volatility, premiums have shot up.
3. In two to three days time, when volatility falls, premiums will go down, then one may square up the positions.