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

June 16, 2020
Time: 8.10 am

Pre Market Report:

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1. The roller coaster ride is on.
2. At some point yesterday, Dow future was down more than 1000 points.
3. But Dow closed in Green.
4. Bank Nifty future was down more than 1000 points down from day before yesterday high to yesterday low.
5. Bank Nifty is trading around 20K but making 20K moves in a month. 800 to 1000 points up move or down move has become common.
6. Yesterday market was supported by Reliance, if not Nifty would have broken even 9600.
7. Reliance has crossed all time high silently.
8. I am expecting a target of Rs 1700.
9. Today that will be interesting stock to watch.
10. All private sector banks fell significantly yesterday.
11. ICICI Bank was down by 5.5% at one point.
12. Banks and NBFCs did very badly.
13. FIIs have sold for Rs 2960 crores.
14. With this, they are sellers for fourth straight day and sold for more than Rs 6000 crores.
15. FIIs seems to be fairly short in the market.
16. They added short possitions in both Index Futures and Stock Futures, bought Put Options and sold Call Options.
17. That is the perfect situation for short covering rally.
18. Now SGX Nifty is showing a huge gap up of about 180 points.
19. There will be panic among short sellers.
20. That will take Nifty above 10K at least momentarily.
21. But after the short covering, I am expecting at least one dip, as FIIs are expected to sell further.
22. Moreover DIIs will like to book some profits at higher level, typically above 10K as they supported the markets at 9500-9600 range.
23. Sold Reliance Puts heavily expecting sharp move up side in Reliance.
24. In this kind of high volatile markets, short straddle is the best way to handle market volatility.
25. Premiums are so high on both sides.
26. While writing this blog, SGX Nifty is showing 10009.
27. All the beaten down stocks are likely to see short covering.
28. Nifty future may trade between 9880 to 10080.