Pre Market Report, November 7, 2016 | Stocks and Commodities

November 7, 2016
Time: 8 am

Pre Market Report:

1. Last week was the worst week when Nifty lost nearly 300 points.
2. There were many bad news that affected the markets.
3. Axis Bank came with very bad set of numbers and that was the starting point.
4. Then came Tata issue.
5. After that Hillary Clinton's email issue.
6. Then last Friday, it was Pharma issue and Reliance 1.5 billion fine issue.
7. Markets fell continuously for the last one week.
8. US markets were no different.
9. US markets fell for 9 consecutive days and this has happened earlier in 1980.
10. But in US the magnitude of fall was not big.
11. Despite historic fall for 9 consecutive days, US markets fell only about 3%.
12. Yesterday FBI has cleared the Hillary's email issue.
13. So Dow futures are up by more than 200 points.
14. Asian markets are mostly higher.
15. SGX Nifty hit a high of 8528 and now trading around 8500.
16. This positive news brightens the chances of Hillary in US election.
17. India VIX is likely to fall and hence option premiums.
18. In the last one week option premiums have steadily shot up.
19. Friday's Cash market figures of FII and DII will have to ignored as these figures include L&T stake sale by Govt. for Rs 2100 crores.
20. Otherwise, FIIs have shorted in the F&O market heavily.
21. So there may be huge short covering rally if things turn positive.
22. If Hillary wins, we can expect Nifty to retrace all losses and to trade 8680-8720 levels.
23. Today Bank Nifty will be in focus.
24. PNB came out with results which were above expectation and this may lead short covering rally not only in PNB but also in other PSU Banks like SBI and Bank of Baroda.
25. Today ICICI Bank will be in focus ahead of its results.
26. Hope ICICI Bank does not go the way Axis did.
27. PNB Housing Finance listing is today, that will be another reason for PNB action today.
28. To be on the safe side I have sold Nifty 8000, 7900, 7800 Puts in December and 9000, 9100, 9200 Calls in December.
29. In Bank Nifty I am trying a new strategy.
30. Sold 19000 Put 2 lots, bought 19400 Put 1 lot, sold 19500 Put 1 lot, sold 19500 Call one lot, bought 19600 Call 1 lot, sold 19900 Call one lot and sold 20000 Call 1 lot.
31. I initiated these positions on 28th October.
32. Last Friday I closed 19600 Call, 19900 Call and 20000 Call as maximum profit potential has been achieved.
33. Nifty future is expected to trade between 8460 and 8540 today.
34. There will be good resistance in the region 8540-8550.