Pre Market Report, December 5, 2016 | Stocks and Commodities

December 5, 2016
Time: 9 am

Pre Market Report:

1. Italy refrendun results came in line with expectation and the Prime Minister of Italy will be resigning.
2. Though many people said if Italy refrendun is "NO", markets will crash, in reality most Asian markets are flat and there is no crash.
3. Even European futures have recovered and now trading only 0.25% to 0.5% lower.
4. US futures are also down only slightly.
5. So as for as markets are concerned, Italy refrendum has become a non event.
6. On Friday Bank Nifty was volatile due to MSS Bond issue news.
7. FIIs have sold for Rs 190 crores in Cash market.
8. So FII selling has slowed down.
9. But the disturbing trend emerged in DII buying.
10. DIIs were net buyers everyday for the last one month but sold for Rs 418 crores on Friday.
11. SGX Nifty is trading about 10 to 15 points lower.
12. My guess is that our markets are likely to recover in the hope of RBI rate cut this week and may fall after RBI policy due to US rate hike.
13. Only after US rate hike, our markets may bounce back meaningfully.
14. So for next two weeks it is going to be volatile.
15. I sold Bank Nifty 17500 Put 20 lots at Rs 200 and bought 18000 Put 10 lots at Rs 350. I also sold YES Bank futures two lots at Rs 1150 and sold 1140 Put two lots.
16. In the above strategy, there will be profit if Bank Nifty moves up or down moderately.
17. For today, Nifty future may take support at 8080.
18. Resistance will be at 8180.
19. I plan to sell Bank Nifty 20000 Call option if Bank Nifty trades more than 200 points higher and plan to sell 16600 Put option if Bank Nifty trades more than 200 points down.