Pre Market Report, October 7, 2019 | Stocks and Commodities

October 7, 2019
Time: 8 am

Pre Market Report:

1. Friday was a disappointing day.
2. Nifty fell 300 points in one day few days before and fell 200 pointson Friday, taking 2 day fall to 500 points.
3. That is half of the gains made after major corporate tax cut.
4. In fact, small caps lost 100%, midcaps lost 85% and Bank Nifty lost 75% of the gains made after tax cut.
5. Few days before, rumours about RBL Bank, YES Bank pledged shares sale, etc brought down the market.
6. On Friday RBI cut rates by 25 basis point which was in line with expectation only.
7. Still Bank Nifty fell more than 1000 points from intraday high.
8. HDFC Bank, Kotak Bank and ICICI Bank contributed to about 90% of the fall in Bank Nifty.
9. Over the week end, HDFC Bank declared 22% growth in deposits and 19% growth in loans.
10. That is a big positive but again it was expected.
11. When so many banks are in trouble, natrally business will move to stronger banks like HDFC Bank.
12. Bajaj Finance also announced the loan book.
13. These tow stocks should do well today.
14. US-China Trade war started again.
15. China announced that they are not looking for any deal ahead of the talks.
16. I thought Nifty will trade between 11200 and 11800.
17. Now 11200 is broken, next support comes at 11000.
18. FIIs keep selling in Cash market.
19. Even after a major corporate tax cut, they bought just for 2 days.
20. After selling for 3 consecutive months, July, August, September, now in October they have already sold for about Rs 3000 crores.
21. SGX Nifty started with some optimism around 11250 but gave up most of the gains and now trading just 10, 15 points higher.
22. Markets are likely to be volatile.
23. Results season begins with IndusInd Bank on Thrsday during market hours.
24. Thursday evening TCS and Infosys on Friday are some key results this week.
25. Option premiums are so high, in weekly options, Bank Nifty 29000CE trading around Rs 80 which is 1300 points away.
26. Due to holiday tomorrow, there are only 3 trading sessions for this week expiry.
27. I have sold lot of 29000, 29200, 29500CEs in weekly options.
28. Any intraday rise in Nifty, I will be looking to sell 11400CE.
29. Unless Govt announces DTC, markets are not going to recover in a meanigful way.
30. So markets will be under pressure, IndusInd Bank, TCS, Infosys results will decide the trend next week.
31. VIX is likely to spike up due to elections in 2 states also.
32. Over all picture is not looking good for bulls.
33. Nifty future should not break Friday's low, it will be really bad if it breaks.
34. Only consolation is Crde prices for us.
35. Bank Nifty ATR is more than 700 points for the last few days.
36. With this kind of big moves, there is no point is predicting the range for today's trade.