Pre Market Report, August 29, 2019 | Stocks and Commodities

August 29, 2019
Time: 8.15 am

Pre Market Report:

1. Few weeks before I mentioned that markets are going to be very volatile but Nifty 11000 short straddle will give good profit.
2. Today is expiry day and Nifty is likely to open around 11000.
3. This is the nature of high volatile markets after a huge fall.
4. I remember in 2015, China devalued its currency and markets fell.
5. After that for next 4 months Bank Nifty expiry to expiry closed not more than 50 points plus or minus.
6. But intra month volatility was so huge.
7. Now also after Nifty falling 1000 points, markets are so volatile but 11000 seems to be the middle number.
8. US markets closed higher yesterday but Asian markets are mostly negative.
9. There has been no news about US-China trade deal.
10. After China saying that they did not make any calls to US, it looks like there is no communication between them.
11. By September 1, new tariffs will come into effect.
12. So September will also face uncertainties and world markets are likely to react negatively even in September.
13. In India, Auto sales figures are not likely to be good and FIIs selling relentlessly irrespective of market conditions.
14. India Bull Housing Finance will be under pressure as it is out of F&O and Laxmi Vilas Bank CEO resigned.
15. Sun Pharma may do well as SEBI cleared its case.
16. Nifty has already seen a sharp intraday recovery yesterday afternoon.
17. If it falls again, there may not be any any short covering.
18. In fact if 10980 is broken, markets may come under severe selling.
19. But markets are likely to be highly volatile.
20. I have sold lot of 10900PE, 10800PE, 11100CE, 11150CE, 11200CE.
21. Bank Nifty sold 28000CE, 28100CE, 28200CE.
22. Scared of selling PE in Bank Nifty.
23. That is because due to depreciation of Rupee, IT stocks may cushion the fall in Nifty.
24. But Bank Nifty being a sectoral index, there may not be any such cushion.
25. Moreover yesterday all private sector banks fell and that is a dangerous sign.
26. FIIs are selling continuosly, no matter what Gove does.
27. Govt announcements came too little, too late.
28. Yesterday FIIs have sold for more than 900 crores but DIIs have bought for less than one third of that.
29. So by seeing this figure, SGX Nifty started trading lower by 20, 30 points.
30. Today morning when Asian markets are trading lower, SGX Nifty lost another 10, 20 points.
31. So Nifty is likely to open around 11000.
32. Nifty future traded at discount both yesterday and day before yesterday for most part of the day and only during short covering period turned into premium.
33. Today again it may go into discount in the morning.
34. Max Pain for Nifty is at 11000 and Bank Nifty at 27800.
35. On any recovery intraday, I am looking to sell 11150CE.
36. If markets fall drastically then I might buy 11000PE and sell more 10900PE.
37. Even if markets fall, it may not fall below 10900.
38. So be prepared for anoter volatile day.
39. Bank Nifty 28000CE has huge OI.
40. On any intraday recovery, one can sell 28100CE or 28200CE.
41. Remember to maintain strict stop loss as markets are likely to make big moves in the last half an hour.
42. I am looking for recovery as long as 10980 holds.
43. Today's range is 10980-11150.
44. Keep close watch on Reliance which has been under performing for the last few days.
45. Bank Nifty may trade between 27600 and 28200.