Pre Market Report, March 20, 2020 | Stocks and Commodities

March 20, 2020
Time: 8.15 am

Pre Market Report:

1. US markets stabilised.
2. For the first time in last two weeks, it did not move more than 4%.
3. Asian markets are all positive.
4. SGX Nifty hit a low of 8000 yesterday night, now trading almost flat.
5. PBoC expected to cut Prime Loan rate, but so far no news.
6. Probably they decided not to cut rates.
7. Yesterday our markets experienced worst volatility.
8. In first 3 minutes Bajaj Finance fell 20%, then shot up 20% only to fall 10%.
9. 50% move in just one trading session, that too such a bluechip stock.
10. Same was the case with many other stocks like HDFC Twins, Kotak Bank, ICICI Bank etc.
11. Nifty fell 700 points then shot up 700 points and then fell 300 points.
12. That is a total swing of about 20%.
13. FIIs continue to sell at the rate of 4K to 5K crore.
14. This kind of selling has not happened even in 2008.
15. Now commodities also moving violently.
16. Crude down 25% one day, 25% up next day.
17. Coming to today's trade. I am expecting some short covering today.
18. PM hinted some stimulus by saying 'Economic Task Force" headed by FM.
19. Govts all over the world are taking some steps.
20. SO it will make sense for short sellers to cover the shorts today (and to short again on Monday morning) so as to avoid loss due to any big gap up.
21. They are not likely to lose, as markets are at very low level, possibility of gap down is very low.
22. If there is no short covering till the end of the day, I am planning to short April Nifty future and sell 2X7000PE. Lower break even is at 5000.
23. On the other hand, if Nifty crosses 8500, I am planning to sell 9000CE in March expiry.
24. Though markets were very bad, stocks like HDFC Bank closed in Green yesterday.
25. Moreover, we can expect LIC to enter again today afternoon, to support the market.