Pre Market Report, January 5, 2018 | Stocks and Commodities

January 5, 2018
Time: 8.35 am

Pre Market Report:

1. US markets closed at another record high.
2. Dow crossed 25000.
3. Dow took 8 years to move from 8000 to 16000, but in just one year moved from 16000 to 25000.
4. US markets are breaking out of a long term consolidation of 15 years.
5. Next 10 years, US markets may continue to move higher.
6. We are on the verge of breakout.
7. A breakout may happen before the results season starts, but sustaining the breakout may depend on corporate results.
8. Due to Iran unrest, Crude prices are higher.
9. So both Banks and Auto sectors are not doing well.
10. These two sectors will have to do well for breakout.
11. Maruti has corrected nearly 6% in the last one month.
12. Tata Motors not going anywhere.
13. Option sellers are very bullish.
14. Highest open interest among Puts is at 10400.
15. Highest open interest among Calls is at 11000.
16. So majority of the option sellers believe that Nifty will trade between 10400 and 11000.
17. That is a very good bullish sign.
18. I have invested heavily in Mutual Funds in the last two weeks.
19. Many people think that we are in the Euphoric stage of the market. But that is not true.
20. We are still in the "Skepticism" stage out of the four stages "Pessimism, Skepticism, Optimism, Euphorea".
21. There is a long way to go.
22. I expect Nifty to touch 12000 by the end of this year.
23. I am selling Nifty 8500PE and 9000PE in December expiry.
24. I am also selling 12500CE as an hedge for my Mutual Fund portfolio.
25. FIIs continue to buy in Cash market.
26. The January trend is likely to follow for the whole year.
27. So remain bullish, sell options at a decent distance, even 10000PE was trading above Rs 18 until day before yesterday, giving 6% return for the investment.
28. Today we can expect breakout in Nifty.
29. But first breakout will be met with profit booking.
30. Today Nifty future is likely to trade between 10500 and 10600.