Pre Market Report, February 18, 2020 | Stocks and Commodities

February 18, 2020
Time: 8. 20 am

Pre Market Report:

1. Asian markets are falling after Apple warning.
2. Apple's production units are in China and they are affected by Corona virus.
3. SGX Nifty is down by about 50 points.
4. Yesterday Global cues were good, yet India under performed.
5. AGR hangover is still there.
6. Yesterday IDEA was up as it paid some AGR dues.
7. Later the news came that SC has refused to instruct the Govt not to encash Banker Guarantee.
8. Again it fell and dragged other related stocks.
9. Moody has cut the growth rate of India.
10. That is also having some effect in SGX Nifty.
11. Most important, both FIIs and DIIs were net sellers in Cash market.
12. IF FIIS and DIIs both are selling in Cash market, FIIs shorting heavily in F&O, who is going to save the market.
13. This time I bought lot of Options.
14. Yesterday I bought 12100PE and sold 2X11900PE.
15. In Bank NIfty, bought 30800PE and sold 2X30500PE.
16. In addition, sold lot of Call options.
17. Nifty 12200, 12250CE in weekly and Bank NIfty 31200, 31400, 31500CE in weeklies.
18. Yesterday's fall was very bad but since futures gained premium and that is why it did not look very bad from F&O point of view.
19. Bank Nifty did very badly, also it was so volatile.
20. Kotak Bank was the only Bank which traded in Green.
21. State Bank and other PSU Banks fell badly.
22. Today SBI will be in focus as it got SEBI clearance for its SBI Card IPO.
23. If markets recover, SBI may recover faster.
24. Reliance is a beneficiary of IDEA problems, yet Reliance also fell yesterday.
25. But sometimes, when everything looks bad, markets recover.
26. As that is the best time for short sellers to cover their positions.
27. Last time, Nifty future briefly broke 12000 then recovered about 250 points.
28. We have to see whether that is repeated now.
29. Markets have to deal with Corona Virus Global cues as well as IDEA AGR Local cues.
30. Some people are talking something like Corporate Tax cut.
31. That may not happen, for many reasons, (i) Last fall came because of wrong Govt policies and markets fell nearly 15%. This time the fall was not because of Govt. (ii) This time Govt may not have any muscle power to do something drastic.
32. Markets may shoot up anytime by short covering, so it will make sense to sell Call options in March or April series, so that it will be easier to manage.
33. Nifty future may trade between 11980 and 12120.