Pre Market Report, December 15, 2017 | Stocks and Commodities

December 15, 2017
Time: 8.15 am

Pre Market Report:

1. Exit polls indicate clean sweep for BJP in both Gujarat and HP.
2. Markets were highly volatile for the last few days.
3. But markets may stabilise and move forward if BJP wins with comfortable majority.
4. SGX Nifty hit a high of 10508 in panic square off by short sellers.
5. But now it is trading around 10360.
6. This is still a gap up of 60 to 70 points.
7. We do not have to talk about global cues as local cues will dominate the markets.
8. We can expect a better peformance by Bank Nifty today.
9. But too much of optimism is not good.
10. In the past, exit polls have gone wrong.
11. Best example is Trump winning and Brexit.
12. So the real action will be on Monday.
13. I closed most of my positions yesterday.
14. I sold December Nifty 10000PE, bought January Nifty 10000PE and sold three times January 9500PE.
15. Similarly, I sold December Nifty 10500CE, bought January 10500CE and sold three times 10800CE.
16. I created Put positions when Nifty future was below 10200 and created Call positions when Nifty future was above 10260.
17. So yesterday itself, I had a profit of Rs 1700 for one lot, since I did 10 lots, I made a profit of Rs 17000.
18. This kind of high volatile, uncertain environement, only two strategies are safe, (i) Spread ratio, like what I mentioned above, (ii) pair trading, like going long in HDFC Bank and short in ICICI Bank.
19. Our markets were hihly volatile between 10100 and 10500 for the last four months.
20. This is a long consolidation. So breaching of any level, the trend will be very strong.
21. We have been consolidating for more than 4 months despite global cues being very good.
22. So, if all time high is crossed, then markets will move significantly higher in the next few months.
23. But that is assuming there is no bad news for stock market in the budget.
24. If Long Term Capital gain is taxed, then markets will go for a good correction.
25. For today, we need not talk about support, resitance may come around 10400.