Pre Market Report, December 08, 2020

 Nifty future has lost more than half of its premium over the spot.

Is that an indication for consolidation?

Or the rally will continue?

Pre-Market Report :

1. US markets closed mixed once again.
2. Nasdaq is up for 9 days in a row.
3. Nasdaq and Nifty are in a different world now.
4. Asian markets are also mixed.
5. But SGX Nifty is higher.
6. FIIs have gone crazy, keep pumping in more than Rs 3K crore every day.
7. DIIs selling aggressively, still could not stop runaway rally in markets.
8. Nifty was at 10800 in September expiry, in less than 10 weeks, Nifty is at 13400.
9. During this period, Bank Nifty is up by 50%.
10. This is happening, despite Reliance, HDFC Bank, Kotak Bank are underperforming in the short term.
11. What will happen if these stocks rally 5 to 10%?
12. PSU Banks are in full Bull grip, SBI now at Rs 270.
13. Just a few weeks before, it was below Rs 200.
14. Bank of Baroda is up more than 50% in the last few weeks.
15. This rally is too fast and furious.
16. Correction, as and when it happens, is also going to be very painful.
17. I am suggesting my friends sell their portfolio, to move funds to Bharath Bond, and sell ATM PE on March 21 Expiry or Dec 21 Expiry.
18. That way one can gain 15%, I do not think markets will move another 15% from here in the next year.
19. Even if it moves, can sell more PEs to manage.
20. Bank Nifty seems to have broken out, though it closed almost flat yesterday.
21. The next leg of the rally may come from Pvt Sector banks like HDFC Bank, Kotak Bank.
22. Other Pvt Sector banks are already up significantly.
23. But HDFC Bank and Kotak Bank alone contribute about 50% to Bank Nifty.
24. Sleeping giant, Reliance, may also come into the picture in the next leg of the rally.
25. But a small correction of 200 to 300 points in Nifty will be healthy before the next leg of the rally.
26. Since Global cues are negative, DIIs are selling more aggressively, we have to be very careful about today's gap up.
27. Today's gap up may be an opportunity to sell.
28. The market is likely to see some selling pressure if the opens gap up and then, in case, if the first one-hour high is taken out, then it is the time to be bullish for the day.
29. Nifty future has lost some of its premium.
30. That indicates consolidation for the markets.
31. Nifty 13500CE has the highest Open Interest in weekly options.
32. That should be stiff resistance.
33. Nifty future may trade between 13280 and 13480.