Pre Market Report, November 9, 2017 | Stocks and Commodities

November 9, 2017
Time: 8.50 am

Pre Market Report:

1. US markets closed higher.
2. Asian markets are also higher.
3. SGX Nifty is up by about 15 points.
4. Entire world markets are doing well.
5. But we are moving with high volatility.
6. Day before yesterday, due to Demonetisation anniversary fear, huge FII sell figure of about Rs 10000 crores, USFDA warning to Lupin all dragged the markets down.
7. Yesterday we continued to fall as traders stop losses were hit.
8. Nifty has corrected nearly 200 points in just two days.
9. Usually in a bull market, corrections will be very fast and furious and will last only two to three days.
10. Within two to three days stocks fall by 10 to 20% and the buying will emerge again.
11. Since the Global cues are good there is no reason to believe that this is a trend reversal.
12. Call option premiums have not crashed despite Nifty falling nearly 200 points in two days.
13. Many far out of money options are traded actively in most stocks.
14. Say, for example, Auro Pharma 52 week high is Rs 809, but 940CE is trading at Rs 4.50 giving about 6% return for the Span margin paid.
15. Yesterday, despite Nifty falling 47 points on closing basis, Put option premiums have not gone up below 10200 strikes.
16. So people feel strongly that 10200 will not be broken. Remember Nifty broke 10300 yesterday intraday.
17. Markets may stabilise today after two days of drastic fall.
18. Bank Nifty may also stabilise, Bank Nifty has fallen by about 500 points in two days.
19. HDFC Life IPO is fully subscribed. So HDFC Bank may do well. ADR is up by more than 1%.
20. We need to see how Axis Bank performs today after the block deal issue.
21. Markets may bouce back in the afternoon if not trending lower in the morning.
22. Bank Nifty weekly expiry may add volatility to the market.
23. Yesterday itself it was highly volatile.
24. But option sellers and scalpers have made good money.
25. As I said yesterday, Nifty future should take support at 10320.
26. Now the resistance will be at 10420.