Pre Market Report, April 16, 2020 | Stocks and Commodities

April 16, 2020
Time: 8 am

Pre Market Report:

1. On Monday both FIIs and DIIs have sold for more than Rs 1000 crores.
2. Yesterday, at the time of our market opening, US futures were down.
3. Yet, Nifty opened gap up of 200 points and then almost hit 9300.
4. I did mention yesterday that 9200-9300 will be a huge resistance area, due to 38.2% Fibonacci Retracement.
5. Then the selling came, the selling was so severe, within 2 to 3 hours, Bank Nifty fell more than 6%.
6. Reliance, Kotak Bank, HDFC Bank, HDFC alone contributed more than 100 points for Nifty's fall.
7. Nifty, on a close to close basis, fell only 70 points, but these 4 stocks alone contributed more than 100 points.
8. Broader markets were not that bad, mid cap and small cap indices were in Green.
9. The number of stocks advancing was much higher than the declines.
10. So it is basically concentrated selling in few stocks.
11. US markets yesterday continued the game of "one day up, one day down"
12. Asian markets are down.
13. SGX Nifty broke 8800, now trading around 8860. That is around yesterday's low.
14. Markets have clearly reversed the trend.
15. DIIs have sold for Rs 4000 crores in 4 days.
16. Why should DIIs sell so aggressively at this low levels?
17. The million dollar question is, "Is there redemption pressure in MF?"
18. If that happens, markets can go for another wave of selling, fast and furious one.
19. Most TAs expecting Nifty to test 7500 again.
20. If that is tested, after falling slowly, may in a two to three months time, then the damage may not be big.
21. People will have time to adjust, hedge.
22. TCS will be in focus as it declares results today evening.
23. HDFC Bank came under severe selling pressure ahead of its results on Saturday.
24. Trump is going to make some announcement today, FM will be meeting PM today regarding Fiscal Stimulus 2, all these will keep markets highly volatile.
25. Expect some flash news between 2 pm and 3 pm, "Sources say FM Press meet tomorrow"
26. Channels will do their job of increasing volatility towards the end of the day.
27. Crude oil prices are stabilising after hitting 18 year low, after inventory report.
28. Towards the end of the day, there was some short covering.
29. Nifty was up more than 100 points from intraday low, Nifty future turned to 30 point premium from discount in the morning.
30. I went short in Nifty future (May series) and sold 9000PE on Monday.
31. Around closing time, Nifty future was down about 70 points but 9000PE was trading at the same price.
32. So I also booked profit in short position.
33. Possibly many hedged people like me, would have booked some profit in Nifty future.
34. It is time to be cautious, on every rise, I am planning to square up my Put options, looking to sell Call options in May series 10000Ce and above.
35. Nifty future may trade between 8800 and 9000.