Pre Market Report, September 6, 2019 | Stocks and Commodities

September 6, 2019
Time: 8.15 am

Pre Market Report:

1. Our markets were highly volatile yesterday, as usual.
2. But one consolation is that "Lower High, Lower Low" cycle is broken.
3. Yesterday it was "Higher High, Higher Low"
4. Last Friday when GDP data came as a shocker, on Monday trading, Nifty was trading around 10900 until 2.45 pm and fell 100 points in last 45 minutes.
5. Now Nifty is not able to trade firmly above 10900.
6. This is despite change in Global sentiment.
7. Last few days Global markets are all doing very well.
8. FIIs have old for Rs 561 crores.
9. One, their selling has come down from Rs 1000 plus crores everyday.
10. Two, yesterday for the first time in last few days, DII buying was more than FII selling.
11. (i) Govt seems to be responding well for slowdown, making right kind of noises, (ii) Global cues are good, (iii) FII selling may slow down as those who wanted to sell would have sold by this time mostly, (iv) Weak currency will invite new investors from abroad, (v) DIIs are aggressive and want to stabilise markets.
12. Due to all these reasons, short sellers at some point will close their positions and that may trigger a short covering rally.
13. But when it will happen, nobody knows.
14. It may happen today or one day before September 20 GST council meeting.
15. Reliance, HDFC and Private Sector banks are looking very bad.
16. Recovery in broader market is going to be very difficult unless these stocks see some short covering.
17. SGX Nifty is trading about 20, 25 points higher.
18. That is due to Global cues.
19. Yesterday's high, 20DMA are around 10960.
20. So that will have to be taken out by the bulls to gain some confidence.
21. If not, markets will go for sideways once again.
22. Yesterday Auto stocks recovered due to GST cut talk by Nitin Gadkari.
23. Bank Nifty is making huge moves everyday.
24. As long as Nifty trades below 11000, one has to be cautious about long positions.
25. I expect some sharp up move in the last one hour, if the markets stay weak in the first half.
26. If Nifty moves more than 100 points higher, then I will sell December 12000CE and if Nifty moves more than 100 points lower, then I will sell December 10000PE.
27. I am expecting Nifty to trade between 10000 and 12000 until December.
28. This month only strangle and straddles are working.
29. I have Nifty 11000 short straddle in September, October and December.
30. They are all doing very well.
31. Will get maximum profit if Nifty expires around 11000.
32. On every rise, I am also selling 11200CE in September expiry.
33. Between 10950 and 11200, there are multiple resistances.
34. Nifty future may trade between 10850 and 10980.