Pre Market Report, July 17, 2019 | Stocks and Commodities

July 17, 2019
Time: 8.50 am

Pre Market Report:

1. Yesterday before out market open, SGX Nifty was down slightly.
2. But as soon as our market opened, it seems that DIIs have put huge buy orders.
3. Shorts started covering.
4. I mentioned earlier that Reliance and HDFC Bank may see some short covering ahead of their results.
5. But HDFC Bank did not move higher, despite the news of special dividend.
6. But Reliance, Axis Bank, YES Bank, L&T, etc saw some short covering rally.
7. YES Bank was the star, shot up 14%.
8. Later when US markets opened, despite strong corporate results, US markets struggled to trade in Green.
9. FIIs have stepped up their selling, sold more than 400 crore worth of shares, taking advantage of short covering rally.
10. But DIIs have bought for about Rs 700 crores.
11. By seeing this FII sell figure and US markets, SGX Nifty started trading about 20 points lower.
12. So yesterday's rally was seen as just a short covering rally and many think the rally may not continue.
13. But SGX Nifty has not been a good indication for the last many weeks.
14. Usually SGX Nifty just follow Global cues.
15. But in the last few weeks we have not been following Global cues.
16. Bank Nifty under performed yesterday.
17. It was Auto and other sectors that did well.
18. IndiaBulls Housing debt was downgraded, opened lower by about Rs 30 in the morning but wiped out all losses to trade in Green.
19. So ona negative news, if a stock trades positive, the bottom is somewhere near.
20. High risk investors can consider investing in India Bulls Housing at this level.
21. Dividend yield is very good, it has already corrected more than 50% due to NBFC issues.
22. But it may take a year or two to see the benefits.
23. Since it is a high beta stock, be prepared for violent moves.
24. One advantage of high beta stocks, Option premiums will be very good.
25. Look at YES Bank, ATM straddle trading at 17% premium.
26. Last few times, whenever Relaince touched 1300, selling came, we have to see this time what is going to happen.
27. PSU Banks did well yesterday when HDFC Bank, Kotak Bank, ICICI Bank under performed.
28. SBI is lokking very bullish.
29. Expect the volatility to continue though India VIX is around 11.5. 
30. Nifty future may take support at 11600 and resistance may come at 11720.