Pre Market Report, June 07, 2019 | Stocks and Commodities

June 07, 2019
Time: 8.30 am

Pre Market Report:

1. Yesterday our markets fell due to DHFL scare.
2. All Banks and NBFCs fell drastically.
3. Entire Monday's gain was wiped out.
4. Now the markets are back to square.
5. Tuesday as well as yesterday, both FIIs and DIIs were net sellers in Cash market.
6. Yesterday they sold for more than Rs 2100 crores.
7. When this kind of selling comes from both FIIs and DIIs who is going to support the market?
8. But Global cues are not bad.
9. Dow is up by 900 points in last 3 trading sessions.
10. SGX Nifty is down by about 20 points.
11. markets may consolidate with negative bias.
12. Though markets fell, VIX did not shoot up.
13. So the follow on selling may not be very bad.
14. Nifty 11800PE added about 1.7 lakh in OI.
15. That may act as a good support.
16. I am holding some short positions in bank Nifty and long positions in Nifty.
17. I have hedged my short position but did not hedge the long positions.
18. Today planning: +1X12000PE, -4X11500PE as hedge for long positions.
19. Looking to sell more call options in stocks.
20. I still feel that Nifty will trade between 11600 and 12400 in this series.
21. That is the range for short straddlers will make money.
22. I have June 12000 short straddle at Rs 400 and July short straddle at Rs 510.
23. India Bull Housing selling its entire stake in Indiabull Real estate.
24. When this NBFC issues get resolved, IndiaBull Housing can go to Rs 1500.
25. Merging with Lakshmi Vilas Bank will be a big positive in future.
26. Long term investors can look at this stock.
27. But it is highly volatile stock, people who can manage by options, option premiums are high.
28. Crude started moving higher as Mexico-US talks progressing well.
29. Today US jobs data will be out in the evening.
30. Our markets may see some sharp move towards the end of the day.
31. First half is likely to be negative as nobody wants to buy, everyone wants to sell.
32. Only short covering can take market higher.
33. That may happen towards the end of the day as short sellers may not like to carry positions over weekend.
34. Interest rate cut is good in the medium term, though in short term everyone is looking at Banks' exposure to DHFL.
35. It is the debt funds that is feeling the heat.
36. Time to sell call options and protect the downside by buying Put options and financing either by calls or further down puts.
37. Since the VIX is low, option premiums are less and hence make sense to protect the downside.
38. Stocks to watch: banks (DHFL Exposure), Auto and OMCs (Crude rising), IBULL Housing (stake sale), HUL (analysts meet).
39. Nifty future should take support around 11820.
40. Falling below, I will take bearish view.