Pre-Market Report, September 24, 2020

  Pre-Market Report:

• Yesterday, our markets were highly volatile.
  
  
• In the morning blog, I mentioned that everything looks negative.
  
  
• Dollar Index above 94, FII selling of Rs 2000 crore in Cash market, Negative Asian clues, etc.
  
  
• 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.
  
  
• SO markets were in good shape, until FIIs press the sell button.
  
  
• Bank Nifty fell 500 points, Nifty fell 200 points.
  
  
• Then DIIs seems to have entered and bought heavily.
  
  
• That triggered a powerful short covering, in a matter of few minutes, Bank Nifty shot up 500 points from the low.
  
  
• So traders stop loss was hit on both sides.
  
  
• Bank Nifty future is at 120 points premium, that too just one day before expiry.
  
  
• That shows the power of short covering.
  
  
• All these Drama happened when European and US futures were firmly in Green.
  
  
• US markets opened, Dow was up about 175 points, from there, sell off came and Dow closed 525 points.
  
  
• From intraday high to low, Dow fell about 750 points.
  
  
• Now SGX Nifty is below yesterday's low of 11028.
  
  
• Which means, again Bank Nifty below 21000.
  
  
• 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.
  
  
• US Political tension, no Corona Virus vaccine so far, no progress in US Stimulus, stretched valuations, all contributing to the fall.
  
  
• For weekly Options, I sold 11000PE and 11200CE, it seems that I will have to book some losses.
  
  
• Nifty is likely to open around 11000.
  
  
• India VIX may shoot up.
  
  
• This will be a huge gap down.
  
  
• SGX Nifty has already hit 11000.
  
  
• We should be happy if Nifty expires above 11000.
  
  
• FIIs have sold for Rs 2000 crore day before yesterday, Rs 4000 crores yesterday, this kind of selling do not stop immediately.
  
  
• So markets now clearly, "Sell on Rise"
  
  
• Any recovery, I am planning to sell Call options.
  
  
• Reliance could not sustain at higher levels.
  
  
• 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.
  
  
• DIIs are likely to support the markets if Nifty breaks 11000.
  
  
• So 10980 is an important level.
  
  
• Nifty future may trade between 10980 and 11150.