Huge Volatility in the Last Week, December 28, 2016 | Stocks and Commodities

December 28, 2016
Time: 8.35 am

Pre Market Report:

1. US markets closed marginally higher.
2. Most Asian markets are also marginally higher.
3. We are on different path.
4. On Monday Nifty fell about 80 points.
5. On Tuesday Nifty shot up by about 130 points.
6. Despite such a sharp short covering rally, FIIs have sold for Rs 712 crores in Cash market.
7. It is the DII buying of over Rs 1500 crores in Cash market that led the short covering rally.
8. In F&O, there is a huge buying in options.
9. So sharp moves are still expected.
10. DIIs may make sure that Nifty closes above psychological level of 8000 by the end of this year.
11. Bank Nifty underperformed Nifty yesterday.
12. If there is one more leg of short covering that may come from Bank Nifty.
13. Axis Bank is still not recovered even the last one day's of loss.
14. Market volatility may continue as FIIs are still in Sell mode.
15. During the normal market conditions without any big global cues, this is the first time I am seeing such a big selling by FIIs in the last one month.
16. All tobaco stocks shot up yesterday, some even by 20%.
17. I sold Infy 960 Put (Rs 2.75) in December and bought 960 Put (Rs 20) in January and double the quantity sold 940 Put (Rs 14.25) in January.
18. This strategy is due to its result in two to three weeks. I have done it right now in order to reduce the Buy option price by selling current month Sell option.
19. After two days of high volatile trade, Nifty is likely to trade range bound.
20. Nifty future may trade between 7980 and 8080.