Pre Market Report, April 7, 2020 | Stocks and Commodities

April 7, 2020
Time: 8.15 am

Pre Market Report:

1. US markets fell 400,500 points on last two days of last two weeks.
2. Everyone was expecting Black Monday yesterday.
3. As expected Corona Virus infections did not come down.
4. But number of new cases reported was not more than previous days.
5. Then people decided that the worst id over.
6. Dow shot up more than 1600 points, almost double of what it fell in the previous two trading sessions.
7. Coming to India, Nifty touched 9000 ahead of RBI measures.
8. But then it started falling, fell more than 900 points in a matter of few days.
9. Now SGX Nifty is up by more than 350 points.
10. ICICI Bank ADR was down 8% on Friday, but up 11% yesterday.
11. Bank Nifty is likely to see some short covering rally.
12. Though markets were falling for the last few days, India VIX was also down significantly.
13. Put option buyers will be in a very bad situation, if they have bought without knowing how Greeks affect the option prices.
14. Most of the retail people are bearish and bout Put options.
15. Next question, is this huge gap up is sustainable? Will the markets continue its rally.
16. Surely, NO.
17. Our problems do not come to an end in just one day.
18. In fact we are in for more challenges, if Corona Virus infections spreads more.
19. But Bear market rallies are sharp and powerful.
20. That is due to the consensus "shorts" in the market.
21. If short covering continues, Nifty can even touch 10000, (of course, not in one way move).
22. Kotak Bank is likely to move 10% higher, as there is some clarity in MSCI issue, if not ine one day, in the next few days.
23. You may remember I sold Kotak Bank 1000PE, HDFC Bank 700PE, ICICI Bank 250PE, Bajaj Finance 1800PE.
24. In addition, I bought ICICI Bank 290CE, sold 320CE, 330CE.
25. Sold Put options in Nifty 6500 and below aggressively.
26. On any bounce, I am planning to sell 10000CE in May and June.
27. April 10000CE, the premium may not be good, if there is any good premium, will sell that too.
28. Today it will be the day of ICICI Bank, HDFC Bank, Kotak Bank.
29. Bank Nifty is likely to out perform Nifty today.
30. YES Bank is holding very well in this fall, that is an interesting counter to watch today.