Pre Market Report, Feb 28, 2020 | Stocks and Commodities

Feb 28, 2020
Time: 8.15 am

Pre Market Report:

1. Dow fell 1191 points.
2. This is the worst point wise fall in the History of Dow.
3. Also Dow fell about 1000 points on Monday, Tuesday and Thursday.
4. Now Dow is down more than 10% this week.
5. This is the fastest 10% fall in the History of Dow.
6. We do not know what is in store today.
7. The fear may be more ahead of weekend.
8. The Corona Virus inflicting maximum damage to stock markets.
9. Asian markets are all down.
10. SGX Nifty indicating about 200 point fall in Nifty.
11. Last six weeks is one of the worst periods for us also.
12. Nifty from 12400, fell to 11600, then shot up to 12300, then fell to 12000, then shot up to 12250, then fell to 11900, then shot up to 12200, only to fall below 11500.
13. This is nearly 30% swing in Nifty.
14. This time Bank Nifty has not been doing that bad.
15. In fact, yesterday many banks closed in Green.
16. With more than 10% cut in most of the markets, we can expect some kind of action from Central Banks or Govts.
17. But what they can do? Nobody knows.
18. Our markets will also be in jitters as GDP data is expected in the evening.
19. Crude keeps falling, That could be one reason for Reliance under performance.
20. 20% of the Nifty 50 stocks hit fresh 52 week low yesterday.
21. The figure will be more today.
22. The Economic impact of Corona Virus is what markets are worried about.
23. Metals and Autos are worst affected in Feb series.
24. March series is not opening well.
25. The trading range for March series will be wider, 11000 to 12000.
26. Since markets are in oversold conditions, any good news, markets will shoot up.
27. That is why Call premiums are also high.
28.  The fear is at its peak.
29. Nifty future should take support at 11400.
30. No need to talk about any resistance.
31. Every day Nifty has been breaking previous day's low.
32. So shorting on every rise makes sense.
33. I keep selling Call options only.
34. Yesterday sold Bank Nifty 30800CE, 31000CE in weekly and Nifty 12000CE in monthly.
35. As premiums are high and markets can recover anytime, it is better to sell far OTM Calls.
36. The downside from here may be limited, so one can do Put Ratio spread also.
37. Earlier I bought 12000PE and sold 2X11700PE, the break even is at 11400.
38. Now it looks like the break even will be tested today.
39. Keep selling more Call options to manage.
40. Moody says Global Economy will enter recession in first half and that is not a good news.