Pre Market Report, July 24, 2019 | Stocks and Commodities

July 24, 2019
Time: 8.15 am

Pre Market Report:

1. US markets closed higher on back of good corporate results and US-China Trade talks.
2. US is starting face to face trade talk with China on Monday.
3. Asian markets are following US markets to trade in Green.
4. But here the sentiment is very bad.
5. Yesterday the moment Nifty future crossed 11400, huge selling pressure came.
6. Nifty fell more than 100 points intraday and Bank Nifty fell more than 250 points intraday.
7. At the end of the day, we understood the reason for such a big fall.
8. FIIs have sold for whopping Rs 2600 crores in Cash market.
9. In last two days alone, they have sold for Rs 4500 crores.
10. Since budget Nifty has fallen 700 points, FIIs have sold for more than Rs 10000 crores, market cap lost more than Rs 10 lakh crore, bluest of blue chips like HDFC Bank lost more than 10%.
11. This July series is one of the worst July series in the History of Indian stock market.
12. Due to such big negative sentiments, SGX Nifty opened about 20 points lower, but recovered later, now trading only about 5 points lower.
13. Nifty 11300PE has huge open interest, if Nifty breaks 11300, then the fall will be severe.
14. Huge OI added at 11400CE also.
15. So smart money think Nifty will trade between 11280 and 11420 until expiry.
16. I have sold huge amount of 11500CE and 1145CE.
17. Yesterday Kotak Bank saved Bank Nifty from collapsing.
18. Bank Nifty fell more than 1500 points in last few days.
19. L&T and HUL came with good results after market hours.
20. If Bank Nifty opens higher, then one can consider the following strategy: +1X29000PE, -1X29200PE, -1X29200CE. Since I am bearish, I am not buying any protection on the upside. Buying protection only on downside. 
21. This is a broken Iron Fly strategy.
22. Similarly, I am planning another strategy: +1X11250PE, -1X11300PE, -1X11300CE.
23. However if markets rally due to any short covering, we have to manage the positions.
24. There is a huge premium in Bank Nifty future which will have to collapse by tomorrow afternoon.
25. These kind of strategies are high risk strategies, do it only if you know how to manage.
26. In case of any short covering, Bank Nifty can rally 200 to 300 points easily. (as it fell 250 points so easily yesterday)
27. HDFC Bank will play crucial role in Bank Nifty expiry.
28. There must be huge short in HDFC Bank as it fell 10% within few days.
29. Auto stocks are stabilising at lower levels.
30. Hero Moto looks good.
31. Once again Reliance met with huge selling pressure around 1300.
32. Nifty future may trade within yesterday's range at least in the morning. There may be some violent moves towards the end of the day as FIIs usually enter the ring in afternoon.
33. Bank Nifty will be very difficult to predict due to HDFC Bank weihtage.