Post Market Report, November 5, 2015 | Stocks and Commodities

November 5, 2015
Time: 7.30 pm

Post Market Report:

1. Another disappointing day, markets fell 8 out of last 9 trading sessions.
2. As usual markets closed at the low end of the day.
3. Though the reasons attributed as Bihar election results, poor corporate results and US rate hike fear also contributed to the fall.
4. All exit poll results show neck to neck win for JDU.
5. But if the difference between NDA and Nitish alliance is very low, then BJP may claim the right as it would be the single largest party and may try to form the Govt. with the help of 'others'.
6. So SGX Nifty has not reacted much, it is marginally higher as Europe is trading firm and US futures are up.
7. So for tomorrow's trade exit poll results is a non event.
8. Markets are likely to open marginally higher (if US markets close in Green) and then will react to corporate results as 8 out of 50 Nifty 50 stocks will declare results tomorrow. 
9. FIIs have sold heavily for Rs 991.87 crores.
10. DIIs have bought for Rs 636.15 crores. I have mentioned earlier that if Nifty breaks 8000, then DIIs will buy aggressively.
11. Markets will wait until Monday morning to react to Bihar election results.
12. But the rumor floating around seems to be true, non of the Exit polls favored BJP.
13. Now corporate results is the real drag in the market, today Tata Steel and Cipla both fell and they both declared results that did not meet the expectation.
14. People are shorting the stocks ahead of the results as most companies come out with bad results.
15. SBI, Bank of Baroda, PNB, BHEL, Bosch, Tata Motors, ONGC all fell ahead of their results tomorrow.
16. Only exception was M&M which rose marginally ahead of its results tomorrow.
17. Due to heavy selling by FIIs, the upside for the markets is limited.

Follow up of Strategy:

1. India VIX did not go up as expected.
2. Exit poll results have become non event and hence VIX may not crash as expected.
3. We we need to wait until Monday to see the effect.
4. At 3 pm, Bank Nifty 16500 Put was trading at Rs 200 and 17500 Call was trading at Rs 225.
5. Nifty 7700 Put was trading at Rs 50 and 8300 Call was trading at Rs 33.
6. The combined premium for Bank Nifty is Rs 425, so there will be loss only if Bank Nifty expires below 16050 and expires above 17950 by the end of this month.
7. Similarly, combined premium for Nifty is Rs 83 and there will be loss only if Nifty expires below 7617 or above 8383.
8. We will not be required to wait until the expiry, we will be able to close the positions by Monday with reasonable profit.