Pre Market Report, June 6, 2018 | Stocks and Commodities

June 6, 2018
Time: 8.45 am

Pre Market Report:

1. US markets ended mixed.
2. Asian markets are generally flat with positive bias.
3. SGX Nifty is down by about 20 points.
4. FIIs have turned net sellers in all three segments, Cash market, Index Futures, Stock Futures.
5. Cash market selling is the worst one as it shows that they are not interested in buying HDFC Bank shares.
6. More and more stocks are hitting 52 week low every day.
7. About one third of the stocks are trading at 52 week low.
8. Markets look good just due to handful of stocks like Reliance, HDFC Bank, Kotak Bank, etc.
9. Today RBI policy will be in focus.
10. Markets may not make big moves before the policy announcement.
11. Option premiums are so high in Bank Nifty due to HDFC Bank news and RBI policy.
12. Bank Nifty weekly option 25200PE is trading above Rs 5, we just have two trading sessions, the buyer will make profit only if Bank Nifty falls more than 1100 points in two days.
13. Similarly Call options are also trading at high premium.
14. After the RBI policy, premiums may collapse.
15. For the next few days, Bank Nifty is likely to be highly volatile due to the movement in HDFC Bank.
16. Yesterday I went short in HDFC Bank and sold ATM Put option.
17. Nifty 11000CE added more shares in open interest, so that is going to be huge resistance for Nifty this month.
18. Nifty 10200PE also added some shares in open interest and that may be the support.
19. Coming to RBI policy, there is a 10% chance of rate hike while 90% chance of status quo.
20. My gut feeling is that it will be status quo and will become non event.
21. Option buyers, be careful, exit when there is momentum, if you hold, premiums may collapse after the policy.
22. Option seller, be careful, markets may make some big move after the policy, have some protection.
23. Nifty is likely to take support at yesterday's low of 10550.
24. Resistance may also come at yesterday's high of 10630.