Pre Market Report, October 15, 2019 | Stocks and Commodities

October 15, 2019
Time: 7.30 am

Pre Market Report:

1. Markets are highly volatile as usual.
2. Yesterday SGX Nifty was almost flat buy Nifty shot up more than 100 points intraday.
3. Last two hours was very volatile.
4. Bank Nifty fell 300 points then shot up 300 points and again fell 500 points, all in 2 hours.
5. Best strategy is to have some ratio spreads and short straddles.
6. All short straddles have given good profit yesterday.
7. I have taken slightly bullish view and sold PEs in monthly and CEs in weekly.
8. FIIs have bouht for Rs 796 crores in Cash market.
9. This is second consecutive buy for more than Rs 750 crores.
10. This has happened first time since budget.
11. In Nov 2019, BJP lost all 5 state elections.
12. For next 10 weeks, FIIs sold continuously.
13. In late Feb, they started buying after Indo Pak border issue.
14. In the next one month Nifty shot up 1000 point.
15. Same way, since budget, FIIs have sold continuously for 10 weeks.
16. Though Govt cut corporate tax, due to Global turbulence, FIIs continued to sell.
17. Now they started buying, may be due to Govt stand change and US-China partial deal.
18. If they continue to buy, there is a possibility of Nifty hitting all time high in the next one to two months.
19. Due to the budget blues, markets have ignored all positives.
20. Crude is stable below US$60, Interest Rates are at historic low, good monsoon, sensitive Govt. etc
21. Reliance has shot up more than 20% from recent low.
22. Nifty deserves all time high before December 2019.
23. Bank Nifty is finding huge resistance around 28600.
24. Once that is crossed, we can expect some decent short covering that can propel Nifty also.
25. In fact Bank Nifty has been under performing Nifty for the last few days.
26. Nifty has been forming higher high, higher low for last two days.
27. It will be interesting to see whether that happens today also.
28. Bank Nifty has been making more than 4% move everyday.
29. Despite markets moving higher, India VIX keeps moving higher.
30. HUL came with decent numbers and FMCG stocks will be in focus.
31. Crude is also down yesterday night by about 2.5%, so Auto and OMCs will also be in focus.
32. PSU Banks are the problems, though we are down only 5 to 7% from budget day high, most PSU Banks, including SBI, are down by 30 to 40%. SBI was around Rs 375 on budget day, now around Rs 250. Bank Baroda was around Rs 140 on budget day, now below Rs 90.
33. Now any dip is a buying opportunity.
34. Nifty will face stiff resistance around 11420.
35. Reliance and HDFC Bank will declare results during the week end.
36. Markets may breakout next week if both results are good.
37. Then election results on 24th October.
38. Nifty should teat at least 11700 by the end of this month, if bullish momentum is sustained.
39. SGX Nifty is up by about 30, 35 points.
40. I have done few ratio spreads as I am maintaining some bullish view.
41. In BN weekly options, (i) Bought 28200CE, sold 2X28700CE, (ii) Bought 28300CE and sold 2X28800CE, in monthly (iii) Bought 28500CE, sold 2X29500CE.
42. In weekly Nifty options, bought 11400CE and sold 2X11500CE.
43. Mostly these strategies are no credit no debit strategies.
44. Will make money if markets are moderately bullish.
45. In addition maintaining BN 28000, 29000, 30000 short straddles. 
46. Sold BN weekly options 29800, 30000 on Friday, booked profit and sold 29500CE.
47. Also sold 27000PE in weekly BN.
48. Sold Dec 11500 short straddles.
49. If Nifty falls more than 100 points from intraday high, then it is a buying opportunity.
50. Nifty future should trade between 11320 and 11450.