Pre Market Report, December 27, 2019 | Stocks and Commodities

December 27, 2019
Time: 8.30 am

Pre Market Report:

1. In May 2019, we organised "Options Conclave" conference in Mumbai.
2. I suggested selling Dec 12000 straddle at Rs 1200.
3. Markets saw many things, BJP win, Bad budget, Fixing of those mistakes later, US-China Trade was accelerated, Hong Kong unrest, etc.
4. But after 7 months, Nifty closed at 12126.
5. Straddle sold at Rs 1200 closed at Rs 126.
6. In fact, the year before, though I was not popular in Twitter, suggested selling 11000 straddle on January 31, the day ahead of Feb 1 budget when the whole country was talking about LTCG.
7. In that year, Nifty closed around 10800, giving Rs 1000 per share profit.
8. In India, trading in long term options is not popular.
9. For your information, Warren Buffet trades in long term options, called LEAPS in US.
10. November expiry Nifty was at 12151.
11. December expiry Nifty was at 12126.
12. The whole of December was a consolidation.
13. We can expect some trending in January.
14. There are few reasons.
15. One, FIIs allocation in the new calendar year.
16. There is no reason for them to turn bearish as stock valuations are too good, though we are near all time high.
17. Two, corporate results may be good due to reduction in corporate tax cut.
18. Three, some positive developments towards US-China Trade deal can be expected.
19. I sold 12400, 12500, 12600CE in Nifty and sold 12000, 11900, 11800PE.
20. In addition, sold straddle at 12000.
21. Last one hour of fall yesterday was due to expiry related issues and mainly Reliance.
22. Reliance retail share holders have lost 50% in one day due to unfavorable swap ratio with Reliance.
23. That was another reason why Reliance fell so much.
24. Reliance has lost nearly 100 rupees from the recent high.
25. In January series, markets will go all over the places.
26. But still I am expecting Nifty to trade between 12000 and 12500.
27. Any fall towards 12000 is a buying opportunity.
28. All Banking stocks fell yesterday.
29. But Banking stocks look better than other stocks
30. Bank Nifty may trade between 31000 and 33000 in the first half of January.
31. Second half depends on corporate results.
32. Today SGX Nifty trading around 12220.
33. Nifty may trade within a range today as volumes will be less.