Pre-Market Report:
- US markets closed in Green finally.
- But Asian markets are mostly down.
- SGX Nifty is down slightly, by about 10, 15 points.
- But rest assured, today's market will be highly volatile.
- Usually, Wednesday trades are highly volatile.
- Now FIIs selling of Rs 2000 crores worth of shares in the Cash market, Dollar Index above 94, negative Asian cues, all will add to the volatility.
- Yesterday Nifty took support around 1100 and Bank Nifty around 21000.
- With yesterday's fall, Bank Nifty has fallen about 20%.
- That is one of the most severe corrections.
- Yesterday Pre Open, Nifty closed above 11300 but sold off as soon as markets opened.
- In between, there were few attempts for recovery.
- Now markets have become "Sell on Rally".
- DIIs supported the markets, for the first time in the last 3 months, by pumping in about Rs 800 crores.
- So we can expect them to support at lower levels.
- The next support for Nifty is at 11000 only.
- Reliance and HDFC Bank, both were very weak in yesterday's trade.
- They are Numbers 1 and 2, in Index Weightage. So that is the reason why Nifty could not sustain at higher levels.
- The problem in this fall is that 'No meaningful shorts were created'.
- Since there are no shorts, the short-covering rally also ruled out.
- We can expect Nifty to consolidate between 11000 and 11300.
- Bank Nifty broke 21000 yesterday and that is very bad news.
- IT stocks may outperform, Rupee may depreciate today.
- Selling Call options aggressively both in Index and Stocks.
- It seems that this volatility will continue until the US elections.
- Planning to add some short positions if Nifty breaks yesterday's low.
- Shorting Bank Nifty future and selling ATM puts is a good idea.
- One good thing is that despite the fall in markets, India VIX did not move higher.
- It does not mean markets will rise.
- That means markets may not fall drastically from here.
- Nifty future may trade between 11080 and 11280.
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