Pre Market Report, October 17, 2019 | Stocks and Commodities

October 17, 2019
Time: 8 am

Pre Market Report:

1. Yesterday too markets were highly volatile.
2. Given the fact that both FIIs and DIIs are on the buy side, the volatility is surprising.
3. Yesterday Bank Nifty fell almost 500 points intraday.
4. And then recovered about 300 points immediately.
5. As I stated earlier, Bank Nifty has been under performing.
6. May be markets are not happy with IndusInd Bank.
7. So if that is the case, then HDFC Bank result on Saturday and Axis Bank result on Monday evening (Monday is a trading holiday) will decide the course on Tuesday next week.
8. Unless Bank Nifty recovers, Nifty can not rally too much from here.
9. Today and tomorrow, markets may consolidate with positive bias.
10. Reliance and HDFC bank results will decide the next leg.
11. If everything goes well, we can expect 11700 by next week.
12. This time SBI results are coming much earlier.
13. Since PSU stocks have been beaten very badly, SBI high Rs 375 on budget day, now Rs 255, there may be some short covering ahead of the results next Friday.
14. All these can take markets higher next week.
15. Until then on any intraday dip, keep selling Put options at 11200 and below.
16. Nifty 11500 short straddle is also a good idea.
17. Due to Doji pattern, Bank Nifty option premiums are very high.
18. Bank Nifty 29000CE is trading around Rs 50 for today's expiry which is very high.
19. If markets open flat, as indicated by SGX Nifty, I may look to sell both 28000PE and 29000CE.
20. Yesterday once again both FIIs and DIIs were net buyers.
21. So logically positive bias will have to be maintained.
22. Lot of action reserved for next two weeks, corporate results and election results.
23. Markets may consolidate for next two days and IT, Banking stocks have to recover for a good rally.
24. There are only 9 trading sessions in this series including today.
25. But premiums are so high and hence logically short straddle is the best idea.
26. I have 28000, 29000, 30000 short straddles in Bank Nifty.
27. Bank Nifty future had good resistance around 28600 and that was broken twice to test 28800 but fell back.
28. Any bullishness only if Bank Nifty future crosses 28800.
29. I sold Call options at 28800, 29000 and 29200 for today's expiry.
30. I am not expecting Bank Nifty to close above 28800 today.
31. If that happens, then Nifty will have to shoot up by about 100 points.
32. Planning to sell some call options in Axis Bank and HDFC Bank ahead of their results.
33. Be ready for another day of volatility.
34. Volatility reduced in Nifty, yesterday it traded within a range of 63 points.
35. But Bank Nifty story is different.
36. Nifty future may trade between 11420 and 11540.