Pre Market Report, October 21, 2015 | Stocks and Commodities

October 21, 2015
Time: 8 am

Pre Market Report:

1. US markets closed marginally lower after a choppy session.
2. Asian markets are mixed, some up and some down.
3. SGX Nifty is marginally lower at around 8250.
4. Nifty future traded at a discount to Nifty in yesterday's trade.
5. Bank Nifty futures also traded at a discount to Bank Nifty.
6. So all those who went long expecting a break out are exiting.
7. The excess optimism is gone.
8. Today HDFC Bank is set to declare results.
9. Market expect a maximum move of only 4% either side in HDFC Bank.
10. India VIX has gone up slightly after falling for the last few days.
11. Option premiums in Bank Nifty Call options are falling very fast.
12. Highest open interest among Call in Bank Nifty is at 18500. Those who have sold 17000 Put and 19000 Call based on my recommendation can consider squaring up 19000 Call (or you can just leave it by keeping a stop loss at Rs 25, if you have additional margin) and Sell Bank Nifty 18500 Call option in order to optimise the return.
13. Nifty is expected to trade between 8100 and 8400 until expiry and Bank Nifty is expected to trade between 17500 and 18500 until expiry.
14. The downside risk is higher, in case of any bad news, so safely we keep Nifty 8000 Put and 8400 Call and in Bank Nifty 17000 Put and 18500 Call. Those who want to increase the risk slightly can consider selling 17200 Put in Bank Nifty.
15. Nifty future is expected to trade in the same range expected in the last two days i.e. between 8220 and 8320.
16. Since tomorrow is a holiday, markets may move sharply is the last 2 hours of trading today.
17. Towards the end of the day, option premiums are likely to fall. There are only 5 more trading sessions after today and Nifty is not expected to swing more than 250 points, so if Nifty trades around 8250 by the end of the day, people will start selling 8000 Put and 8500 Call in huge quantities to make decent return in one week time.
18. I closed all my positions in TCS options. My strategy has given good profits in both Infosys and TCS.
19. I do have positions in Auro Pharma, Dr Reddy, Maruti which I have not recommended to to the readers. 

DISCLAIMER

The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Readers are advised to consult their Financial consultants before taking any position. The analysis is partially Technical and partially Fundamental. The views expressed are the Author's own views.