Pre Market Report 18-Jun-2024

Summary

PR Sund discusses the recent absence from creating videos due to his son's marriage. He reviews the Nifty's market movement, noting a decisive close above 23400 indicating a breakout and potential for a 120-130 point gap up. With positive economic data and political stability, he anticipates an upward trend, suggesting a trading strategy involving call and put options around the 23200-23800 range. Despite mixed signals from FII, banking and IT stocks are underperforming, hinting at significant potential for market growth. He predicts a resistance level at 23800 for the week and advises on trading strategies for aggressive traders within the 23500-24000 range.

Takeaways

• 🎉 PR Sund apologizes for not being able to release videos due to his son's wedding ceremonies last week.
• 📈 Nifty futures moved above 23400 during the first four trading sessions but could not sustain and closed below it, indicating resistance at that level.
• 🔄 The speaker explains that repeated attempts to hit a high weaken resistance, eventually leading to a breakout, with the same principle applying to support levels on the downside.
• 🚀 On Friday, Nifty decisively closed above 23400, which is considered a breakout, suggesting a potential gap up of 120-130 points.
• 📊 The market's reaction to various economic data and political events can cause volatility, but once these events are over, the market tends to trend based on the outcomes.
• 🌐 Positive data and reduced political uncertainties have led to an expectation of an upward trend in the market.
• 📝 A trading strategy was suggested involving buying a 23200 call option, selling a 23800 call option, and selling a 22800 put option, which is directional and could lead to losses if the market reverses.
• 🤔 FAS (Foreign Institutional Investors) are showing mixed signals with large buy and sell volumes, but were net buyers on Friday, hinting at potential market movement.
• 🏦 Banking and IT stocks are underperforming, suggesting that if they start to move higher, it could significantly impact the market.
• 🔮 Analysts predict a target of 24,000 for Nifty, but the speaker believes the range for the current series could be between 23,000 to 24,000.
• 💡 For aggressive traders, a strategy could be developed to profit as long as Nifty trades between 23,500 and 24,000.
• 📉 India weeks are continuing to decline, which is expected to persist, and the speaker still sees 23,800 as the resistance for the weekly series.

Q & A

Why was PR Sund unable to release videos in the last few days?

PR Sund could not release videos in time or had to skip them due to his son's marriage ceremonies, which took place during the last weekend and the week prior.

What happened to the Nifty future in the first four trading sessions of the last week?

The Nifty future moved above 23400 but could not sustain and closed below 23400, indicating a resistance level that the market was attempting to break.

What is the significance of the Nifty decisively closing above 23400 on Friday?

The decisive close above 23400 on Friday signifies a breakout, suggesting that the market is moving past a previous resistance level and may continue to rise.

What does PR Sund suggest about market behavior following a series of events?

PR Sund suggests that markets tend to be volatile and react to each headline when many events are lined up. Once the events are over, the market will digest the outcomes and then follow a trend, which may not be very big but could be a few hundred points on either side.

What was the overall sentiment of the data and political situation according to PR Sund?

According to PR Sund, most of the data were positive for the market, and politically, there were no uncertainties except for the small matter of who would become the speaker, which he expected to be the BJP candidate.

What trading strategy did PR Sund suggest for the market?

PR Sund suggested a strategy of buying a 23200 call option, selling a 23800 call option, and selling a 22800 put option, which is a directional strategy that would profit if the market moves higher.

What is PR Sund's view on the market trend after all the events are over?

PR Sund expects the trend to be on the higher side after all the events are over, given the positive data and reduced political uncertainties.

What is the current range for the Nifty according to most analysts?

Most analysts feel that the range for the Nifty in the next series is between 23,000 and 24,000.

What is PR Sund's view on the banking and IT sectors?

PR Sund notes that banking and IT stocks are currently underperforming, and he speculates on the potential impact if these sectors start moving higher.

What is the significance of the huge open interest in the 23500 call option on Friday?

The huge open interest in the 23500 call option indicates that many traders are expecting the market to rise, and with the gap up, those traders may need to cover their positions, potentially pushing the market even higher.

What advice does PR Sund give for traders regarding the market's support level?

PR Sund advises that if the market approaches yesterday's closing level for any reason, it would be a good time to sell put options, as yesterday's closing itself will act as strong support.