Pre Market Report, July 23, 2019 | Stocks and Commodities

July 23, 2019
Time: 8.10 am

Pre Market Report:

1. US markets closed higher.
2. Asian markets are mostly in Green.
3. But nothing big, we can say flat with positive bias.
4. Yesterday H2B2 shares (HDFC Twins and Bajaj Twins) fell significantly.
5. But apart from these 4 stocks and Kotak Bank (which was volatile ahead of results), other stocks did not do badly.
6. Reliance was up by about Rs 30, Maruti was up by about Rs 150.
7. Surprisingly YES Bank, India Bulls were up.
8. Long term investors can look to buy YES Bank between 85 and 90.
9. Since options give very good premium, cost can be reduced significantly over a period of time.
10. Yesterday I bought around Rs 90 and sold August 100CE at Rs 5.25.
11. If price goes down, I get to keep that Rs 5.25 and my cost becomes below Rs 85.
12. As long as YES Bank not falling significantly, I can look to sell options for Rs 4 to Rs 5 every month.
13. If falls significantly, then I may have to buy and average to continue this process.
14. Yesterday FIIs have sold for about Rs 1900 crores yesterday, one of the highest selling figure in 2019.
15. FIIs have bought call options, probably selling in Futures and buying Call options for hedge.
16. Since the premiums are too low, buying for hedging makes sense, instead of naked selling futures.
17. Bank Nifty has fallen about 1500 points in just 3 days.
18. Nifty has fallen from 12000 to 11300 since budget.
19. Last two days markets surprised us on the downside.
20. We need market to surprise us on the upside one day.
21. I will be adding short positions if yesterday's low is broken.
22. But I am not worried about yesterday's fall as the fall was mainly due to few blue chips.
23. I feel that markets will stabilise or recover from here.
24. Closer to expiry anything can happen, we do not know how much longs are waiting to liquidate or ow much shorts are waiting to be covered.
25. I did lot of ratio spreads in Reliance, I covered everything yesterday.
26. Yesterday Nifty future found support around 11300 and resistance around 11380.
27. So we have to watch for these two levels for follow through selling or buying.
28. Kotak Bank is likely to open higher as it came under selling pressure in the last half an hour yesterday.
29. But whether it will sustain or not is a big question.
30. With corporate earning pouring in, expiry is nearing, longs/shorts are being added by speculators, we can expect more violent moves in the next three days.
31. Nifty future may trade between 11300 and 11420. (For the last few days my range forecast has been going wrong terribly)