Pre Market Report, August 11, 2016 | Stocks and Commodities

August 11, 2016
Time: 8.30 am

Pre Market Report:

1. US markets closed lower after a surge in Crude oil inventory.
2. But Asian markets are mixed.
3. All world markets have been consolidating and not correcting.
4. Here Nifty fell more than 100 points yesterday which was surprising.
5. There was a report (in Economic Times) that said an FII placed sell order for 15,000 lots of Nifty future.
6. And that triggered profit booking as markets are trading at 52 week high.
7. Markets were not happy with AB Nuvo and Grasim merger and Grassim fell the most in Nifty pack.
8. Reliance, HDFC Bank, ICICI Bank, Tata Motors, Grassim contributed more than 40% for Nifty fall.
9. It was just a profit booking, medium term and long term investors need not worry.
10. SGX Nifty has been volatile between 8580 and 8620.
11. As long as Nifty future holds 8580, there is a hope of quick recovery.
12. If 8580 is not holding then Nifty future may slide to the region of 8480-8520.
13. Banking stocks will be volatile due to weekly option expiry.
14. There are no important corporate results except Bank of Baroda.
15. Bank of Baroda may declare the results after the market hours.
16. Option premiums are too high in Bank of Baroda.
17. I am looking to sell some Call options.
18. Bank Baroda 190 Call is trading at 0.85, giving more than 8% return for the Span Margin paid.
19. Bank Baroda is trading around 160, the strike 190 is about 20% higher.
20. I do not think Bank Baroda will move higher by 20%.
21. In fact, so far, except UltraTech, all shares fell post quarterly results.
22. Corporate results were not as expected and that is why markets are struggling.
23. So it may take another 3 months for the Nifty to break all time high.
24. Despite such a fall yesterday, Nifty 8500 Put has the highest open interest among Puts.
25. So Nifty will find very good support at 8500.
26. Nifty future prediction has failed miserably yesterday.
27. Today I expect Nifty future to take support at 8560 and resistance will be at 8760.

Note: Bank Baroda has declared results befor markets open and the results were not good. So no point in selling Call options as Call option premiums will crash at the opening.