Pre Market Report, September 24, 2013 | Stocks and Commodities

P R Sundar, Aditya Trading Solutions

September 24, 2013
Time: 8.15 am

Pre Market Report:

1. US and European markets are trading at 5 year highs and there are no positive cues to push the markets higher.
2. Fed tapering news adds to uncertainty despite their promise to emerging economy heads that they will give clear road map about Fed Tapering at G20 meeting.
3. Our markets are on roller coaster ride, going up by over 500 points in sensex one day and crashing equally next day.
4. Yesterday, it seems that some people knew the Moody's downgrade of PSU banks, so PSU Bank index fell by 5.7%, which was on top of severe fall the day before.
5. Global cues are not good, Asian markets trading lower.
6. Crude oil is trading lower, FII selling in cash market is not as bad as it was expected.
7. Closer to expiry, it will be difficult to predict the market.
8. But the view for October is really bearish.
9. If there are no negative news, Nifty will trade between 5800 and 6200 in October.
10. But put options as far as 5000 is trading actively with an open interest of over 13 lakh shares. And call options as far as 6500 also trading actively with an open interest of over 8 lakh shares.
11. So scary to view the trading range from 5000 to 6500.

Recommendation:

1. Market is likely to move lower as long as there is no short covering. Market is likely to take support at 200 day moving average which is around 5840. So sell 6000 Call option as the market is not likely to close above 6000 by the end of expiry.
2. If the market touches 5860 to 5850, then sell 5700 Put option as the market is likely to break down below 5700 also.