Pre Market Report, August 30, 2019 | Stocks and Commodities

August 30, 2019
Time: 8.15 am

Pre Market Report:

1. Yesterday we opened lower due to negative Asian clue.
2. But along the way, there were some good news.
3. China announced that it will not rataliate for the latest tariff hike by US.
4. Dow future from minus 150 shot up to plus 250.
5. But still our markets did not recover.
6. Our markets tried to recover, but expiry related issues came in.
7. Just after 3 pm all index heavy weights like Reliance, HDFC Bank, ITC, HDFC made vertical falls.
8. Nifty swung more than 60 points in few minutes.
9. Totaly it was a disappointing expiry.
10. Most people thought it will expire around 11000.
11. In the past many times I have seen this kind of expiry.
12. But next day, first day of new expiry, markets recovered most of the time.
13. Now Global cues are also so good.
14. We have to see if there is any recovery in the first half an hour.
15. If there is no 40, 50 points move in the first half an hour, then there will be no hope.
16. But this time, there are few negative things.
17. One, as per reports, brokers will have to square up 2500 to 3000 crores worth of positions by today to comply with new SEBI rules, effective from September 1.
18. Second, very bad local cues, markets are not happy with half hearted measures by Govt.
19. Third, continuos selling by FIIs, they have been selling everyday since July 5.
20. Fourth, we coming closer to September 1, when Auto companies will announce monthly sales data, which is going to be very bad anyway.
21. Despite all these if markets recover, then that will show the strength of the market.
22. We can hope for good recovery.
23. Brexit, US-China Trade war, Hong Kong unrest, Iran problem, South Korea-Japan tension, North Korea luanching missiles, Indian Govt half hearted measures, so many negatives, there is nothing positive.
24. Earlier OI analysis will give some guidance for monthly moves.
25. But now a days all the volumes moved to weekly options and monthly options have too little volume to make any judgment.
26. September is a very small series with only 18 trading sessions.
27. Nifty is likely to trade between 10800 and 11200 in this series.
28. Markets will be trending if any of these levels breached.
29. Bank Nifty making 1000 point move up side and then down side, mking trend following trades difficult.
30. Simply saying, there are 3 possibilities: (1) If there is any significant positive news from US and India, then Nifty may break 11200 and head towards 11400-11500 range, (2) If there is any real bad news from US and India, then Nifty will break 10800 and will head towards 10500-10600, (3) If there are no market moving news, Nifty will trade between 10800 and 11200.
31. So what is the best strategy?
32. For the time being sell both 11000CE and PE expecting market to trade sideways, if there are any progress along the way, then you can either sell additional puts or calls.
33. Time decay will be very fast as we have only 18 trading sessions.
34. I am expecting some sharp up move either in the first one hour or in the last one hour.
35. If there is any sharp move in the first one hour, then I will look to create positions in the morning.
36. Otherwise I will take positions between 2.30 pm and 3 pm.
37. Monday is holiday for both India and US.
38. So traders will like to close their positions ahead of such a long weekend.
39. I will use that opportunity to take fresh positions.
40. Today Nifty future may trade between 10950 and 11080.