Pre Market Report 14-Jun-2024

Summary

In 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

• 📉 The Dow Jones Industrial Average closed lower, while the NASDAQ and S&P 500 ended higher in the US markets.
• 🏆 Apple has surpassed Microsoft to become the number one stock in the world.
• 🌐 Asian markets are experiencing muted performance, with the Nifty index showing only slight gains.
• 💸 Foreign Institutional Advisors (FIIs) sold more than 3,000 crores, while domestic institutions bought more than 500 crores, indicating a shift in market sentiment.
• 📈 Despite selling pressure, the broader markets outperformed, with banking stocks and FMCG seeing a decline.
• 🔢 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.
• 📅 Trading activity is expected to be significant before the holiday, as traders may book profits ahead of a 3-day long weekend.
• 🕒 The last hour of trading on Fridays is often crucial, with retail selling potentially influencing the market more than institutional selling.
• 📊 The Nifty's performance above or below 23,400 will be a key indicator of market direction in the coming sessions.
• 📝 The speaker's son executed a neutral options strategy, expecting moderate bullish movement without extreme volatility.
• 📊 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.
• 📉 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.