Pre Market Report, Septemebr 20, 2013 | Stocks and Commodities

P R Sundar, Aditya Trading Solutions

Septemebr 20, 2013
Time: 8 am

Pre Market Report:

1. Yesterday's market was fantastic or we can say 'Ben'tastic.
2. FIIs bought over Rs 3500 crore in cash market and over Rs 3000 crore in F&O market.
3. But the run up was 'Fast and Furious' from 5100 to 6200.
4. So correction can set in at any time, may be couple of hundred points at least.
5. Today Asian markets are trading flat with negative bias.
6. But here the action will continue due to RBI policy.
7. RBI is expected to ease the liquidity measures.
8. Just like Ban, if Raghu Ram surprises markets with 25 basis point cut in SLR or CRR, then the markets will fly once again.

Recommendation:
  

1. Markets will be volatile ahead of RBI policy. Markets will stabilise after the policy announcement.
2. Markets have run up hugely and traders will not like to carry positions through the week end.
3. So the profit booking may come in the afternoon.
4. So those who are long, consider exiting the positions just before RBI announcement, if Nifty trades closer to 6180.
5. VIX has crashed by 12% as expected. It is likely to crash another 5 to 10% by the end of the day.
6. If Bank Nifty goes up by 100 points, then sell Bank Nifty 12200 Call option and if it falls by 100 points then sell Bank Nifty 10000 Put option. Since there are only 4 more trading sessions excluding today, time value and VIX will work in your favor.