Pre Market Report, May 30, 2019 | Stocks and Commodities

May 30, 2019
Time: 8.30 am

Pre Market Report:

1. Finally we are coming to the end of much hyped May expiry.
2. Buy May disappointed both Bulls and Bears.
3. As of yesterday Nifty is just up by little over 1% since last expiry.
4. But intra month volatility was very high.
5. Even 2 days before I expected Nifty to expire above 12000.
6. But that hope has gone now.
7. That is mainly due to very bad Global cues.
8. US-China trade war is continuing non-stop.
9. Dow fell more than 400 points in 2 days.
10. Yesterday both FIIs and DIIs were net sellers in Cash market.
11. Bank Nifty 31500CE added huge open interest.
12. So for Bank Nifty 31500 and for Nifty 12000 will be a huge resistance for today.
13. Yesterday PSU Banks, particularly SBI, fell. SBI has lost nearly Rs 15 in two trading sessions.
14. ICICI was very volatile, day before yesterday, in last 40 minutes, it shot up Rs 11, yesterday it fell Rs 16.
15. But both Kotak and HDFC Bank stabilised.
16. Reliance is another problem for bulls.
17. Asian markets are mixed.
18. SGX Nifty is almost flat.
19. In the last few days, only option writers are eating the premium.
20. Any break out above 12000, we can expect only in the next series.
21. The hope rally in PSU Banks seems to be fading.
22. SBI shot up from 292 to 362 in less than 10 days.
23. Now started correcting.
24. I am taking a bullish view in SBI now, I am planning the following strategy. Buy 3000 shares in Cash market and then do a short straddle at 350 and sell one 380CE.
25. Will manage the positions dynamically.
26. Planning to short Bank Nifty June future if it touches 31500, then do one short straddle at 31500.
27. These are high risk high reward strategies, may need lot of adjustment trades.
28. If markets open flat and trade range bound, then writers will close positions, leaving a high chance for a violent move towards the end.
29. Net week is RBI policy, also falls on expiry day, so the momentum will build up in Banking stocks.
30. Next week is a truncated week as Wednesday is a holiday.
31. Nifty future may trade between 11820 and 11980.
32. Bank Nifty should trade between 31000 and 31600.