Pre Market Report, August 8, 2019 | Stocks and Commodities

August 8, 2019
Time: 7.40 am

Pre Market Report:

1. Yesterday as expected RBI cut rates by more than 25 basis point.
2. I expected 50 basis point but RBI cut 35 basis point.
3. But markets have gone for sell on news mode.
4. The fear of FII selling continues.
5. But FIIs have sold for only about 400 crores in Cash market.
6. Markets fell in the last 45 minutes.
7. After market close, Pak announced cutting bilateral ties, US markets fell, Dow fell 700 points while its futures were 200 point higher when we closed here.
8. That tiggered a mini panic and Rupee fell about 50 paise, SGX Nifty hit a low of 10754.
9. That is about 90 point fall from yesterday's close of 10863.
10. Later US markets recovered and hence SGX Nifty and Rupee.
11. India anyway does not import much from Pak, India imposed 200% duty on Pak goods after Pulwama attack. That has already reduced the imports significantly.
12. So this Pak news is actually a non event except sentimental reasons.
13. Everyday just before 7 am, US futures are in jittery mode as China fixes currency band at 7 am.
14. Both China and Hong Kong opened positive today morning.
15. So DOW futures recovered more than 100 points now.
16. SGX Nifty future also recovered more than 50 points from day's low.
17. Today is weekly expiry day, markets are likely to be highly volatile.
18. Nifty added huge OI at 11000. There is significant addition at 10950 also.
19. Max Pain is at 10900. So upside seems to be limited.
20. Bank Nifty added huge OI from 28000 to 28500CE.
21. Max Pain is at 27800.
22. So if markets are bullish, then Nifty 11000 and Bank Nifty 28000 will the stiff resistance.
23. Since FII selling reduced, some short sellers may choose to square off their trades and that may trigger a short covering rally.
24. On the other hand if markets continue to see the selling pressure, then 10800 will be a good support in Nifty.
25. Bank Nifty 27500PE saw good addition in OI, so that will be a good support.
26. Option writers are not expecting significant fall from here. That may be due to huge fall in the last 45 minute.
27. Reliance keep falling, as I stated earlier, Reliance has to recover for markets to recover.
28. Yesterday in the first half I sold 11100CE and in the last hour, sold 11000CE. As long as there is no big gap up (which is unlikely) I will be making good profits.
29. In Bank Nifty sold 28100, 28200, 28300CE in the last one hour.
30. If there is any day that is good for short covering rally, then that is today.
31. Let us see if that happens today.
32. Day before yesterday India Bull Housing Finance sold huge call options from 600CE to 700CE.
33. All given good profit.
34. Have some straddles also, despite falling by 15%, short straddle at 500 is still in some profit.
35. Nifty future may trade in a wide range of 10820 and 11000.