Pre Market Report 18-Jun-2024

P R Sundar

17 Jun 202406:55

Summary

TLDRPR 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.

Outlines

00:00

🎉 Personal Update and Market Overview

PR Sund apologizes for the delayed video uploads due to his son's wedding, which took place over the last weekend. He explains the absence from creating content during this period. He then provides an analysis of the Nifty market, noting that despite the Nifty future moving above 23400 during the first four trading sessions, it failed to sustain and closed below this level. Sund discusses the concept of market resistance and support, suggesting that repeated attempts to hit a high weaken resistance, leading to a breakout. He also mentions the market's reaction to a series of economic and political events, which have led to volatility. Most of the recent data has been positive, and with reduced political uncertainty, Sund anticipates a trend on the higher side. He concludes with a trading strategy involving buying a 23200 call option and selling 23800 call option, along with selling 22800 put option, which aligns with his directional view of the market moving higher.

05:00

📈 Market Analysis and Trading Strategy

In the second paragraph, PR Sund continues his market analysis, suggesting that the range for the current series is between 23,000 to 24,000. He advises aggressive traders to consider this range for developing their strategies, with the potential for profit as long as Nifty trades within this range. Sund also discusses the underperformance of banking and IT stocks, speculating on their potential to drive the market higher if they start to perform better. He predicts that 23,800 will be the resistance level for the weekly series and anticipates some selling at higher levels in the coming days. He notes the significant open interest in the 23,500 call option, which could drive the market even higher. Sund also provides a trading tip, suggesting that if the market approaches yesterday's closing level, it would be a good time to sell put options. He ends on a celebratory note, with both a personal family event and the stock market reaching all-time highs.

Mindmap

Keywords

💡Premarket report

A premarket report is a summary or analysis of market conditions before the official trading session begins. In the video's context, it is sponsored by Delta Exchange and discusses market movements and predictions. The script mentions the presenter's absence due to personal reasons, highlighting the importance of such reports for traders to prepare for the day's trading.

💡Nifty

Nifty is a term used to refer to the National Stock Exchange of India's stock index, which is a basket of 50 of the largest and most actively traded stocks in India. The script discusses the Nifty's performance, particularly its movement above and below the 23400 mark, indicating the index's significance in the discussion of market trends.

💡Resistance level

In financial markets, a resistance level is a price at which an asset has a high probability of being sold, leading to a potential reversal in the price trend. The script mentions that the Nifty's resistance became weaker after multiple attempts to hit a high, ultimately leading to a breakout above 23400.

💡Support level

A support level is the price at which an asset is expected to find buying interest and potentially reverse a downward trend. The script discusses how repeated market declines to a certain level can weaken the support, eventually leading to a breakdown and further decline.

💡Breakout

A breakout in trading refers to the price of an asset moving past a significant resistance or support level, often signaling a continuation of the trend in the direction of the breakout. The script mentions a decisive close of the Nifty above 23400 as a kind of breakout, indicating a potential upward trend.

💡Gap up

A gap up is a situation where the opening price of a security is higher than the previous day's closing price, often resulting from positive news or market sentiment. The script describes a significant gap up in the Nifty, suggesting strong buying pressure and an optimistic market outlook.

💡Volatility

Volatility refers to the degree of variation of a trading price series over time. The script mentions market volatility in response to various economic data releases and political events, indicating that the market's reaction to news can be unpredictable and intense.

💡Options trading

Options trading involves buying or selling contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a set price before a certain date. The script discusses a specific options trading strategy involving buying a call option at 23200, selling a call option at 23800, and selling a put option at 22800, which reflects a directional view on the market.

💡FII (Foreign Institutional Investor)

FII refers to foreign institutional investors who invest in a country's financial markets. The script notes that FII's were net buyers on Friday, which can be an indicator of market sentiment and potential future price movements.

💡Banking stocks

Banking stocks are shares of companies in the banking sector. The script mentions that banking stocks are underperforming, suggesting that despite overall market optimism, this sector has not yet contributed to the rally, which could be a potential area for future growth if it starts moving higher.

💡Open interest

Open interest refers to the total number of outstanding contracts that have not been settled. The script refers to a huge open interest in the 23500 call option, indicating a significant number of contracts that have been traded but not yet closed, which can influence market dynamics and price movements.

Highlights

PR Sund apologizes for the delay in videos due to his son's marriage.

Nifty future moved above 23400 but could not sustain, closing below it.

Discussion on the concept of resistance and support levels in the market.

Nifty's decisive close above 23400 indicates a breakout.

Market volatility due to a series of economic and political events.

Market's reaction to the outcomes of economic data and political uncertainties.

Positive data and political clarity leading to an expected uptrend in the market.

Suggested trading strategy involving buying a 23200 call option and selling 23800 call and 22800 put options.

Mixed signals from FAS, with net buying observed on Friday.

Banking and IT stocks underperforming despite overall market highs.

Analysts' target of 24,000 for Nifty, with a potential range of 23,000 to 24,000.

Advice for aggressive traders to develop strategies within the 23,500 to 24,000 range.

India weeks continuing to decline, suggesting a bearish trend.

Expectation of resistance at 23800 for the weekly series.

Huge open interest in the 23500 call option indicating potential for market to move higher.

Suggestion to sell put options if the market approaches yesterday's closing level.

Celebration of both a personal marriage and the stock market's all-time high.