Pre Market Report, February 2, 2015 | Stocks and Commodities

February 2, 2015
Time: 8.30 am

Pre Market Report: 

1. Asian markets are down mostly.
2. China HSBC Manufacturing PMI came below 50, which shows that the economy is in contraction mode.
3. This may not be taken as too negative as after Europe, Japan and India, people expect some kind of stimulus from China.
4. SGX Nifty is trading about 50 points lower.
5. But here, Manufacturing PMI, monthly Auto sales data may change the things a bit.
6. There may be some kind of short covering in Bank Nifty if it falls much as there is RBI policy tomorrow.
7. Though this possibility is very low as there may be no gap up tomorrow as RBI policy announcement comes during the market hours, some short sellers may be afraid of RBI Governor due to his off the track announcements.
8. Nobody is expecting a rate cut, who knows Raghuram may surprise the markets again by tweaking other things like CRR, etc.
9. Coal India will be watched closely. Futures of Coal India may go for discount due to leveraged arbitragers exit. ( I do not know whether Coal India shares alloted in OFS can be sold today or only tomorrow)
10. There was a buyer for 2000 Call option of HCL Tech. but no seller. This is surprising.
11. If that trades again today at that price I am willing to sell.
12.  Also I am willing to sell Adani Ent. 700 Call at Rs 20 as most of the positives are already factored into the price.
13. It looks like sectoral rotation is taking place with Banking down and Power and Infra stocks up.
14. I am holding two lots of GMR Infra at Rs 17.50. I have created this position not because I believe that the share price will go up in short term.
15. I created the position as the risk is very low as the stock has already beaten down beyond a limit.
16. The maximum loss will be only Rs 3.5 Lakhs, assuming GMR Infra share price goes down to 0 and I was prepared for that, though that possibility is very very low.
17. But, I was ready to exit at Rs 20 plus levels, so sold Rs 20 Call option. This happened last month. I pocketed the Call premium. Then rolled over the futures and this month I sold one Rs 20 Call and one Rs 22.5 Call.
18. Nifty future is expected to take support at 8800. Resistance will be at 8920.
19. Note: I made a small mistake in yesterday's article 'Dalal Street Week Ahead', the Nifty range for the week should be "8600 to 9200" instead of "8800 to 9200". Now I have corrected the mistake. I am giving this information to those who have already read the news.