Post Market Report, January 13, 2016 | Stocks and Commodities

January 13, 2016
Time: 8 pm

Post Market Report:

1. Yesterday I did mention that everything was negative here for short term except positive global cues.
2. As expected markets opened higher.
3. I also mentioned yesterday that whether 'the rise in the morning will sustain or it will be sold into' was a billion dollar question.
4. Surprisingly both happened, in the morning the rally was sold into but later markets have recovered more than what was lost.
5. Usually the downtrend will come to an end only after a big panic move where margin calls are triggered.
6. We do not know whether today's move is that kind of a move.
7. It is reasonable to assume that the down trend may be over for short term and stock specific moves may dominate the markets in the next few days.
8. PSU Bank index fell 48% in the last one year, 11 out of 12 PSU Bank index stocks have hit fresh 52 week low, the only stock that was trading higher due to privatisation talk, IDBI Bank, also came under severe selling pressure.
9. Axis Bank, ICICI Bank, Bank Baroda, PNB, SBI, BHEL, Adani Ports, Bharti, Idea, L&T, ACC, TCS, DrReddy, Bosch all hit fresh 52 week low. 
10. Reliance and Infosys were responsible for the recovery as people expect good results from these two companies.
11. So major selling should have been over by now.
12. Surprisingly FIIs have sold for less than 100 crores in Cash market.
13. DIIs have once again bought for more than 500 crores in Cash market.
14. Global cues continue to be good, Europe is trading firm and Dow futures are up more than 100 points.
15. Coming to market internals, despite such a panic move from 7600 to 7420, surprisingly Nifty 7500 Put has the highest open interest.
16. Nifty 7700 Call shed open interest by 3.19 lakh shares. But Nifty 7800 Call added 1.02 lakh shares in open interest.
17. So the action may be between 7500 and 7800 for the next two weeks.
18. But I do not advise selling options as the markets are highly volatile.
19. It is better to wait for VIX to go down some more before initiating positions.
20. If at all you want to sell, then it is better to sell Nifty 7200 Put and 7800 Call. This will give about 7 to 8% return if you are paying only Span Margin.