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

November 5, 2019
Time: 8.20 am

Pre Market Report:

1. Nifty is up for 7 straight sessions.
2. Many people are buying put option expecting a fall in markets.
3. But markets may not oblige them.
4. Instead markets may consolidate for some time around 12K.
5. That is why I bought Nifty 12000CE and sold 2X12300CE in December contract.
6. If markets consolidate or falls, then there will be some profit in this strategy.
7. Yesterday FIIs were net sellers in Cash market, though quantum of selling is very low, about Rs 100 crore plus.
8. This FII selling along with 7 straight session of Gains increases expectation for a minor fall in market.
9. But yesterday itself Bank Nifty fell nearly 400 points intraday.
10. For last few days, Kotak, HDFC, ICICI all under performing.
11. Together they contribute more than 50% for Bank Nifty.
12. So the next leg of the rally can happen only if these stocks perform.
13. Kotak is particularly, too weak.
14. SGX Nifty is trading about 20 points lower.
15. Even today if these 3 banks do not perform well, I plan to sell some call options in these three stocks.
16. SBI is up 20% in last few weeks but Kotak is down by about 3%.
17. That is the kind of under performance.
18. I took bullish view in Bank Nifty and sold 30000PE, 29800PE, 29500PE in weekly options.
19. Yesterday I changed my opinion, sod 31000CE, 31200CE, 31500CE.
20. Now I am hoping for time decay to make money. Will be happy if Bank Nifty does not fall below 30000.
21. Since the Global cues are very good, Nifty may not fall much from here.
22. I sold 11800PE, 11750PE, 11700PE also in weekly options.
23. Consolidation is actually good me at this point.
24. But if Nifty future crosses 11090, the may be some sharp up move.
25. Infosys recovered a little yesterday.
26. If same thing happens in Kotak and HDFC Bank, then Nifty will cross 12K decisively.
27. But probability of correction or consolidation is higher than markets moving higher.
28. So selling some Call options now.
29. Good to sell Bank Nifty 32000CE and 32200CE in monthly options.
30. Nifty future will face resistance around 12020, support may come around 11920.