Pre Market Report, September 5, 2019 | Stocks and Commodities

September 5, 2019

Time: 8.15 am

Pre Market Report:

1. Yesterday markets were highly volatile.
2. Imagine, Bank Nifty fell 200 points then shot up 700 points and then fell 200 points.
3. Nifty broke day before yesterday's low but later recovered.
4. Traders SL is hit whether they have gone long or short.
5. At the end of the day, FIIs have sold for Rs 1800 crores.
6. Yesterday the news broke out that HK is withdrawing Extradition bill.
7. And Hang Seng shot up more than 1000 points.
8. European and US markets also reacted positively.
9. But Nifty under performed. Bank Nifty out performed.
10. This time China has dealt with issues in a more matured manner.
11. Just now there is a news that US-China agreed to talk about Trade Agreement in October.
12. After this news, Hong Kong and China markets are higher.
13. Dow futures shot up by 300 points after this news.
14. Asian markets are generally higher.
15. SGX Nifty has also recovered about 40, 45 points from intraday low of 10855. 
16. But unable to cross yesterday's high of 10905.
17. FIIs short positions are at historic high.
18. PCR of 0.66 is at historic low.
19. We are extremely over sold.
20. But we need some trigger for short covering rally.
21. But we have been getting only bad news locally.
22. Global positive news are ignored.
23. But one good thing yesterday, Nifty future is trading at significant premium of about 50 points.
24. Coming ti OI analysis, Bank Nifty has highest OI at 26500PE and 27500CE.
25. That is a very wide range of 1000 points.
26. Yesterday significant OI added at 27600CE.
27. I have sold 27000PE and 27500CE, expecting markets to open flat, so that I can book some profits.
28. Nifty 10900CE and 11000CE have huge OI.
29. Some 10800 straddles also added.
30. Going by OI, Bank Nifty will have resistance at 27500 and Nifty at 10920.
31. But markets can do anything in this type of high volatile environment.
32. Sine FIIs have decided to sell and they have more reasons to sell as currency is depreciating, there will be huge intraday volatility.
33. Many of my clients have short straddle in December Nifty 11000 and riding this volatility very well.
34. For today's expiry, I have sold 10950CE yesterday. Did some intraday trades at 10600PE, sold at Rs 9 and squareed off at Rs 3.
35. SInce Rupee has depreciated from 68.5 to 73, it is not likely to depreciate significantly from here.
36. There are some signs of short covering in Bank Nifty and Nifty.
37. Also all possible bad news have come out and factored in.
38. So if everything goes well, again we will be moving between 10800 and 11200 in this expiry.
39. So on any bounce back, I will be looking to sell CE at 11200 and above.
40. I bought 10900PE and sold 2X10600PE which I updated few days before.
41. On down side, I prefer ratio spread than naked selling of puts.
42. Nifty future may trade between 10800 and 10950.