Pre Market Report 14-Jun-2024
Summary
TLDRIn the pre-market report, PR Sund discusses the mixed US market performance with Apple surpassing Microsoft as the world's top stock. Asian markets are flat, and despite significant selling by FIIs and domestic institutions, the market remains resilient. Sund anticipates Nifty to trade positively between 23,000 and 24,000, with a focus on the last hour of trading before the holiday weekend. He shares a strategy involving call and put options, highlighting the importance of retail participation and the potential for IT and banking stocks to drive Nifty towards 24,000. The summary also touches on the volatility crash and its impact on traders and the importance of a balanced options strategy.
Takeaways
- đ The Dow Jones Industrial Average closed lower, while the NASDAQ and S&P 500 ended higher in the US markets.
- đ Apple has surpassed Microsoft to become the number one stock in the world.
- đ Asian markets are experiencing muted performance, with the Nifty index showing only slight gains.
- đž Foreign Institutional Advisors (FIIs) sold more than 3,000 crores, while domestic institutions bought more than 500 crores, indicating a shift in market sentiment.
- đ Despite selling pressure, the broader markets outperformed, with banking stocks and FMCG seeing a decline.
- đą The speaker anticipates the Nifty to trade between 23,000 and 24,000, with a positive bias, and believes 23,000 will be held by the Bulls.
- đ Trading activity is expected to be significant before the holiday, as traders may book profits ahead of a 3-day long weekend.
- đ The last hour of trading on Fridays is often crucial, with retail selling potentially influencing the market more than institutional selling.
- đ The Nifty's performance above or below 23,400 will be a key indicator of market direction in the coming sessions.
- đ The speaker's son executed a neutral options strategy, expecting moderate bullish movement without extreme volatility.
- đ Bank Nifty's performance has been disappointing despite overall market highs, with the speaker highlighting the importance of HDFC Bank and Axis Bank in influencing the index.
- đ Volatility has been decreasing, which benefits those with existing positions but is less attractive for new trades due to lower option premiums.
Q & A
What is the current status of the Dow, NASDAQ, and S&P 500 markets mentioned in the script?
-The Dow was down, while NASDAQ and S&P 500 were higher.
Which company has recently overtaken Microsoft to become the number one stock in the world according to the report?
-Apple has beaten Microsoft to become the number one stock in the world.
How are the Asian markets performing, as described in the script?
-Asian markets are described as muted and almost flat, with Nifty only up by 10-20 points.
What was the situation with FIA and domestic institutions in terms of selling and buying in the market?
-FIA was selling more than 3,000 crores, while domestic institutions were buying more than 500 crores, indicating a mixed sentiment.
How did the broader markets perform, according to the script?
-The broader markets outperformed well, with only banking stocks and FMCG experiencing a downturn.
What is the speaker's expectation for the Nifty index in the near term?
-The speaker expects the Nifty to trade between 23,000 and 24,000, with a positive bias.
What is the significance of the upcoming holiday for traders, as mentioned in the script?
-The upcoming holiday means traders may not want to carry positions over the long weekend, leading to potential profit booking.
What was the speaker's son's trading strategy involving call and put options?
-The strategy involved buying a 23,200 call option, selling a 23800 call option, and selling a 22800 put option, expecting the market to be bullish but not ultra-bullish.
How has the volatility been behaving in the market according to the script?
-Volatility has been crashing, falling by 10% the day before yesterday and by 6% yesterday.
What is the speaker's view on the performance of IT and banking stocks in relation to the Nifty's next target?
-The speaker notes that despite the markets being high, IT and banking stocks, such as TCS and HDFC Bank, need to perform for the Nifty to reach the next target of 24,000.
What is the speaker's advice regarding option trading in the current market conditions?
-The speaker advises having a combination of both buying and selling options rather than pure naked selling due to the low premiums and potential for market volatility.
Outlines
đ Market Overview and Trading Insights
The video discusses the mixed closure of US markets with Dow down and NASDAQ and S&P 500 up. Apple has overtaken Microsoft as the top stock globally. Asian markets are mostly flat, and the Nifty index shows minimal movement. There was significant selling by Foreign Institutional Investors (FIAs) and some buying by domestic institutions. Despite this, the market didn't fall significantly, with broader markets outperforming. The banking and FMCG sectors experienced some selling pressure. The speaker expects the Nifty to trade between 23,000 to 24,000 with a positive bias. The trading day ahead of a long weekend will be interesting, particularly in the last hour, and there's an observation on the pattern of institutional and retail selling.
đĄ Trading Strategies and Market Expectations
The speaker shares a trading strategy involving Nifty options, expecting the Nifty to settle around 23,800 in the next two weeks. There's a discussion on the performance of Bank Nifty and how a short straddle strategy has yielded significant profits. The impact of open interest and the behavior of banking stocks, especially HDFC Bank, is analyzed. The IT sector's performance, including stocks like TCS and Infosys, is highlighted. The speaker emphasizes the importance of volatility in trading, advising a combination of buy and sell options due to low premiums. The performance of key banking stocks and their role in driving market momentum is also discussed.
Mindmap
Keywords
đĄPre-market
đĄDow
đĄNASDAQ
đĄS&P 500
đĄApple
đĄAsian markets
đĄFII
đĄDomestic institutions
đĄBulls
đĄNifty
đĄCall option
đĄPut option
đĄVolatility
đĄBank Nifty
đĄOpen interest
Highlights
Apple has overtaken Microsoft to become the number one stock in the world.
Asian markets are flat with no significant direction, including the Nifty index which is only up by 10-20 points.
FII sold more than 3,000 crores while domestic institutions bought more than 500 crores, indicating a mixed sentiment in the market.
Despite selling by FII and domestic institutions, the market did not fall, suggesting underlying strength.
The broader market outperformed with banking stocks and FMCG seeing a decline, possibly due to overvaluation.
The speaker believes that 23,000 will be held by the Bulls and expects Nifty to trade between 23,000 to 24,000 with a positive bias.
Trading will be interesting ahead of a holiday, with a 3-day long weekend, as traders may book profits.
The last hour of trading on Fridays is expected to be particularly interesting due to position adjustments by traders.
Institutional selling in the morning contrasts with retail selling after 2 p.m., indicating a shift in market dynamics.
The speaker's son executed a neutral options strategy, expecting the market to be bullish but not ultra-bullish.
Bank Nifty's performance has been disappointing despite overall market highs.
IT stocks, including TCS and Infosys, have not performed well despite positive news, with TCS struggling to cross 4,000.
Option writers are enjoying the volatility crash, with implied volatility falling by 10% and 6% on consecutive days.
Low option premiums make new trades less lucrative, suggesting a need for a combination of buy and sell options strategies.
Axis Bank, HDFC Bank, and State Bank are crucial for lifting Bank Nifty and continuing the market's upside momentum.
HDFC Bank's performance will be key to watch, as it has been doing well despite a downturn in banking stocks.
Transcripts
hi this is PR Sund welcome to pre-market
report sponsored by delta.
exchange us markets closed mixed Dow was
down NASDAQ and S&P 500 higher and more
importantly Apple has beaten Microsoft
now apple is number one stock in the
world Asian markets are you know I would
say muted is almost flat so
directionless even the gift Nifty is
just up by you know 10 20 points uh
nothing it's going to be almost
flat yesterday FIA is selling more than
3,000 crores the domestic institutions
buying more than 500 CR uh is a little
bit of disappointment for
Bulls after non-stop buying every day
the domestic institutions also join the
hands with the FAS to sell yesterday but
surprisingly yesterday the markets did
not fall for about the markets broader
markets have outperformed very well it
was only the banking stocks that came
down it went up uh fmcg also there was
some kind of a
selling so probably you know the fmcg
has run up too much in the last few
weeks but nothing to worry too much on
the downside I still believe that you
know uh 23,000 will be held by the
Bulls as I told you already I'm
expecting Nifty to trade between 23,000
to
24,000 probably with a positive
bias and today trading will be very
interesting number one ahead of the
holiday uh two day 3 day Monday is a
holiday so I had of a 3-day long weekend
uh Traders will not like to carry
positions home so they might like to
book the profits but who is going to
book the profits people who are holding
a long position or people who are
holding the short position so depending
upon that uh the last one hour will be
very interesting today after 2: p.m. the
market will be very very
interesting look at the last four
trading sessions the first three trading
sessions selling came after 2 p.m. but
those 3 days F and were buyers a net net
figure was
buying yesterday the selling has
happened in the morning itself and net
institutional was selling both fa and da
when it sellers so it'll be reasonable
to assume that you know if the selling
comes in the morning institutions are
selling if selling comes after 2 p.m. uh
it is the retail people who are selling
so now retail people are getting more
and more powerful
so uh today on few things it going to be
very interesting and number one how the
markets are going to behave after all
the events are over so as of day before
yesterday evening all the events are
over but yesterday both institutions
decided to sell so whether the selling
is going to continue or it's going to be
one of incident so that we will know
after seeing today's data that's number
one number two for the last four trading
sessions as in when Nifty future traded
above to
23400 selling came intraday on a closing
basis Nifty future could not close above
23400 even the Nifty spot also so today
it'll be interesting to see whether
Nifty will be closing above 23400 or
below so that's another interesting
thing
uh I'm expecting some kind of a positive
bias irrespective of you know whether f
are selling or not right uh I will be
happy if Nifty uh goes into the next box
23500 to
24,000 uh in fact yesterday my son has
taken a strategy if you want I can share
that strategy uh he bought
23,200 call option so so he bought
23,200 call option sold 23800 call
option and also sold 22800 put
option so this was a 1 is to 4 is3 ratio
trade and the expectation is that
markets will be bullish but will not be
ultra
bullish he will make uh maximum profit
if Nifty goes and settles somewhere
around
23800 in the next 2 weeks so we still
have nine more trading
sessions so however it was a neutral
strategy there was no credit or no debit
in case Market goes down so there might
be some problem but you know he will
start adjusting the
positions so in fact he has taken a bank
Nifty short stradle a few days before in
July series and that has given very good
result and because you know though Nifty
is going higher Bank Nifty is not going
anywhere and Bank Nifty is just making a
bigger intraday move but on a close to
close basis for the last one week it did
not go anywhere so 3,000 quantity of
Bank Nifty shot stle has given almost 15
lakh rupees profit as of now so we still
have how many more six more weeks for
July six maybe seven more weeks I don't
know I have to check July is five weeks
or four weeks I don't know
so uh today you don't see much in the
open interest because nowadays
because of uh you know uh huge moves uh
people don't take you know positional
view for one month two month mostly
people trade with the shortterm like one
day expiry two day expiry 3day expiry
and they got out so because of that you
know uh I don't see much open interest
in the monthly options and people are
just creating a short-term
trads so today is a Friday so the open
interest will start building up for the
weekly series so so that may also have
some
effect yesterday though banking stocks
were down HDFC Bank was doing well so
today we have to see whether HDFC Bank
supports so I would say the bank Nifty
uh performance is actually disappointing
for Bulls so who knows uh in fact though
markets are at such a high place you
know both Banking and it stocks even
there was some good news for Pro you
know the it stocks were going higher but
still TS and infosis not doing
well just few months before TCS block
deal happened around uh 4,42 rupees I
think and you know uh after that it is
struggling to cross 4,000 SO trading
around 3,900 something so who knows if
this it and banking starts start picking
up you know 24,000 will be the next
Target for for Nifty but probably uh it
is too much of expectation for that to
happen in this series who knows probably
in July Series this may happen so
meanwhile option wrers are enjoying the
volatility crash everyday volatility
coming down day before yesterday it fell
by 10% yesterday it fell 6% you know
keeps on
crashing but one bad thing you know
anything happen there will be something
good and something bad good thing is
those who are having positions already
they are getting into good profit
because of IV crash but those who want
to take new trade you know the option
premiums are not lucrative now so that
is why it's always advisable to have a
combination of both buy and sell options
rather than pure naked selling so
otherwise with the low premium if you
sell if the markets make a violent move
you will be in trouble so uh let us see
so what is going to happen so keep
watching for Reliance and HDFC Bank as
usual and icsf bank is the one you know
uh after it a fantastic run from almost
300 Rupees to 1,100 rupees around 1,100
it has been a consolidating
consolidating and kotak bank is also uh
nothing to speak for many many years it
has been trading in a Range so finally
you know it is the responsibility lies
with uh axis Bank HDFC bank and State
Bank to bring up the uh Bank Nifty so
it'll be very very crucial for the
markets uh it stocks especially TCS and
infosis and banking stocks have to
perform for this upside momentum to
continue so hope you enjoyed watching
this video thank you for watching
5.0 / 5 (0 votes)