Pre Market Report, June 12, 2017 | Stocks and Commodities

June 12, 2017
Time: 8.25 am

Pre Market Report:

1. There are three bad news for today's market.
2. First, though our markets closed naer all time high (Bank Nifty closed at all time high), FIIs were net sellers in Cash market, but FIIs sold hugely in F&O.
3. FIIs have sold for more than Rs 1000 crores in Index futures.
4. Second, Nasdaq fell 4% intraday on Friday night as there was a report that IT stocks are at high valuation just like 2000.
5. We all know what happened in 2000, it was dot.com bubble when IT stocks fell more than 50% in US.
6. Third, Maharastra Govt. waived all farm loans and that will affect the sentiment in banking stocks.
7. Nearly 65% of Bank Nifty index consists of just three stocks, HDFC Bank, ICICI Bank and Kotak Bank.
8. All three stocks are not affected by Farm Loan waiver.
9. But PSU Banks may come under selling pressure.
10. SGX Nifty is trading about 50 points lower, this much fall has not happened for a long time.
11. Surely India VIX will shoot up.
12. Since huge shorting took place before the Farm Loan waiver announcement (Bank Nifty future was at a discount of 80 points over Bank Nifty spot), there is a possibility that these shorts may be covered at the lower levels, bringing some support at the lower levels.
13. Most Asian markets are also down, now the focus turns to US Fed ploicy.
14. Release of IIP and Inflation data today evening will add to the volatility.
15. So be ready for a roller coaster ride this week.
16. Yet, Nifty is likely to trade between 9500 and 9800 this week.
17. One can use this fall as opportunity to sell 9000, 9100 and 9200 Puts in June of 8800, 8900 and 9000 Puts in July.
18. DIIs will buy aggressively if there is any fall.
19. As usual this fall may be a shallow one.
20. Avoid NBFC, PSU Banks, IT and Pharma even at lower levels. Go for Auto and Private Sector Banks.
21. Nifty future may take support at 9580.
22. Resistance may come at 9680.