Pre Market Report, August 28, 2019 | Stocks and Commodities

August 28, 2019
Time: 8 am

Pre Market Report:

1. US markets closed lower.
2. But Asian markets are not following US.
3. Most Asian markets are marginally higher.
4. Yesterday I mentioned that after a huge rally, markets are likely to consolidate for next few days.
5. RBI news lifted Bank Nifty, particularly PSU Banks.
6. If not for this news, Nifty would have ended flat.
7. Yesterday markets were volatile but range bound.
8. Right now it is buy on dip market.
9. Nifty is likely to struggle between 11100 and 11200 due to 200DMA.
10. Nifty 11200CE has huge OI and that is likely to be resistance until expiry.
11. Nifty 11000PE added huge OI and that is likely to be support.
12. Yesterday I sold 11000PE during a small dip, now it is closed around Rs 20.
13. I can put SL around Rs 35 today and I am likely to eat all the premiums.
14. At the time of closing I sold 10900PE at Rs 10.50.
15. That seems to be avery safe trade now.
16. That gives 1% return for the capital deployed in two days.
17. Despite huge moves, Reliance has not been moving.
18. That may limit upside for markets along with TCS and Infosys.
19. Since 11200CE has the highest OI and if for one or the other reason 11200 is crossed, then further short covering will take Nifty to 11280 for tomorrow expiry.
20. But chances are very little for that to happen.
21. Today if there is any spike up in Nifty, then I will look to sell 11250CE.
22. This time Govt is palying very smart.
23. They say they will announce two more measures in next two weeks, to keep short sellers at bay.
24. FII selling is attributed to MSCI rebalancing.
25. Once that is over people believe FIIs will turn buyers.
26. Expecting that short covering is seen in FII related counters.
27. HDFC shot up nearly Rs 150 in two days.
28. HDFC Bank, ICICI Bank, Axis Bank all looking good.
29. If everything goe well, markets may consolidate around 200DMA for few days and then may head towards 11400-11500.
30. But that is assuming there is no further escalation of trade war.
31. For now, I look to sell 11000PE on any dip and look to sell 11250CE on any spike.
32. For September, will take view after seeing US and Indian GDP data in the next few days.
33. Bank Nifty 28000PE added huge OI and 27500PE has highest OI.
34. BN 28500CE has the highest OI and added huge OI.
35. Surprisingly 28000PE and CE added huge OI.
36. BN 28000 short straddle was trading around Rs 500 yesterday, people are shorting expecting range bound trade for Bank Nifty.
37. So Nifty between 11000 and 11200 and Bank Nifty 28000 and 28500 is the range for now.
38. Last two days, people are hoping theta decay will work for them.
39. I am taking bullish view and taking long positions on every dip.
40. Nifty future may trade between 11060 and 11200.