Market Report, November 16, 2016 | Stocks and Commodities

November 16, 2016
Time: 11.15 am

Market Report:

1. I could not write the "Pre Market Report" yesterday as well as today morning.
2. I thought missing for two days is too much.
3. So I decided to write though I am late.
4. US and other developed markets keep going up.
5. Emerging markets keep going down.
6. Other emerging market traders have no problem as markets move in one direction.
7. Here due to "Demonetisation" of currency, markets have become very volatile.
8. Bank Nifty moved from 19500 to 18200 and then from 18200 to 20300 and then from 20300 to 19200.
9. This is a huge swing of about 25% and that swing came in just 4 to 5 trading sessions.
10. People are really confused about the impact of 'demeonetisation'
11. Our markets, as I stated earlier, will be in correction mode until end of december.
12. Markets will start bottom out somewhere in December and markets are likely to move higher from January onwards.
13. In January, many things will play out.
14. FII selling should be over by then.
15. US rate hike impact should be over by then.
16. The amount of black money that would not come back to the banking channel will be known by then.
17. What the Govt. will do with the savings due to demonetisation will be clear by then.
18. The impact of demonetisation in Q3 results will be known by the end of January as Q3 results will start pouring in from the middle of January.
19. Budget which is due on the 1st of February will bring speculators in.
20. So until then it will be short selling and short covering.
21. But markets may stabilise in the region of 8000-8200 as most emerging markets have fallen about 8 to 10%.
22. The worst thing is that DIIs have stopped buying in Cash market.
23. In the last two days, FIIs have sold for more than 3500 crores in Cash market, but DIIs have not bought for even a sinle rupee.
24. So even if markets move higher, it will be just because of short covering.
25. If markets move higher significantly, another set of short sellers will enter the market.
26. So for the time being, it is better to be away from the markets.
27. If you still feel that you have to be in, then sell a call option in December or January at a far away distance, if Nifty rises more than 100 points intraday.
28. If Nifty falls more than 100 points intraday, then sell put option in December of January at a far away distance.
29. If you get profits, exit in intraday, try to avoid overnight positions.
30. Volatility index crossed 20 yesterday which is not a good sign.