Pre Market Report, September 24, 2020 | Stocks and Commodities

 September 24, 2020

Time: 8 am

Pre Market Report:

1. Yesterday, our markets were highly volatile.
2. In the morning blog, I mentioned that everything looks negative.
3. Dollar Index above 94, FII selling of Rs 2000 crore in Cash market, Negative Asian clues, etc.
4. But KKR investment in Reliance Retail news and Reliance JIO bundling mobile post paid plan with Amazon Prime Video, Disney Hotstar, Netflix, triggered short covering in Reliance.
5. SO markets were in good shape, until FIIs press the sell button.
6. Bank Nifty fell 500 points, Nifty fell 200 points.
7. Then DIIs seems to have entered and bought heavily.
8. That triggered a powerful short covering, in a matter of few minutes, Bank Nifty shot up 500 points from the low.
9. So traders stop loss was hit on both sides.
10. Bank Nifty future is at 120 points premium, that too just one day before expiry.
11. That shows the power of short covering.
12. All these Drama happened when European and US futures were firmly in Green.
13. US markets opened, Dow was up about 175 points, from there, sell off came and Dow closed 525 points.
14. From intraday high to low, Dow fell about 750 points.
15. Now SGX Nifty is below yesterday's low of 11028.
16. Which means, again Bank Nifty below 21000.
17. One more very important thing, markets are not paying attention right now, that Trump said he will not hand over the power peacefully, in case if he loses the election.
18. US Political tension, no Corona Virus vaccine so far, no progress in US Stimulus, stretched valuations, all contributing to the fall.
19. For weekly Options, I sold 11000PE and 11200CE, it seems that I will have to book some losses.
20. Nifty is likely to open around 11000.
21. India VIX may shoot up.
22. This will be a huge gap down.
23. SGX Nifty has already hit 11000.
24. We should be happy if Nifty expires above 11000.
25. FIIs have sold for Rs 2000 crore day before yesterday, Rs 4000 crores yesterday, this kind of selling do not stop immediately.
26. So markets now clearly, "Sell on Rise"
27. Any recovery, I am planning to sell Call options.
28. Reliance could not sustain at higher levels.
29. With many front line stocks have already fallen 15 to 20%, it will be interesting to see how much more downside can be there from here.
30. DIIs are likely to support the markets if Nifty breaks 11000.
31. So 10980 is an important level.
32. Nifty future may trade between 10980 and 11150.