Pre Market Report 17-Mar-2025

Key Concepts

• GIF Nifty: Nifty futures traded on the Singapore Exchange, used as an indicator of Nifty's opening.
• Fonos Retracement Level: A technical analysis term referring to levels of support or resistance based on percentage retracements of a prior move.
• Time Decay (Theta): The rate at which an option's value decreases as it approaches its expiration date.
• India VIX: A volatility index based on the Nifty 50 Index option prices, indicating market expectation of volatility.
• Decoupling: When markets move independently of each other, not following the typical correlation.
• Margin Release: The freeing up of capital held as collateral for options trades, particularly long-dated options, as they move closer to expiry.
• Trading Band: A price range within which a stock typically trades, indicating consolidation or lack of strong directional movement.

Market Sentiment and Outlook

• Positive Bias: The speaker indicates a slightly positive bias for the Nifty, contingent on it trading above the 22,500 midpoint.
• Trump Tariff Fears: Concerns about potential tariff announcements by the Trump administration had previously weighed on the market. The absence of such announcements has contributed to the current positive sentiment.
• Consolidation: The market is expected to consolidate within a range, with FIIs selling on up moves and domestic institutions buying on down moves.
• Range for Expiry: The speaker anticipates a range of 22,200 to 22,800 for the next four trading sessions and 22,000 to 23,000 for the entire month.
• Potential Upside: The speaker suggests that the market is more likely to move upwards than downwards, as much of the potential negative news (e.g., Trump tariff fears) has already been factored in.
• Importance of 22,500: The speaker emphasizes the importance of Nifty closing above 22,500, suggesting that it would reinforce the positive outlook.

Technical Levels and Analysis

• 22,500 as Midpoint: 22,500 is identified as the midpoint of the 22,000-23,000 range.
• 22,550 as Key Level: 22,550 is highlighted as a very important 50% Fonos retracement level.
• Thursday's Low: Breaking Thursday's low would be a cause for concern on the downside.

FII and DII Activity

• FII Selling: Foreign Institutional Investors (FIIs) are expected to sell on up moves.
• DII Buying: Domestic Institutional Investors (DIIs) are expected to buy on down moves.
• DII Goal: Domestic institutions will try their best to close this month above 22650.

Time Decay and Option Margins

• Option Sellers' Strategy: Option sellers are banking on time decay to profit.
• Margin Release Benefit: Traders in long-term options (e.g., December expiry) will benefit from margin release as the April series approaches. This released margin can be redeployed.

Market Influences

• US Market Decoupling: The Asian markets, including India, are decoupling from the US markets.
• NASDAQ Recovery: The recovery in NASDAQ is expected to positively influence Indian stocks.
• Banking Sector: Banking stocks are expected to perform well.
• Reliance Industries: The performance of Reliance Industries is crucial, as it has significant weightage in the Nifty.

Stock Specific Movements

• IndusInd Bank: The stock has fallen significantly and is showing signs of recovery, but it is currently trading within a band.
• HDFC Bank, ICICI Bank, and Reliance Industries: These three stocks, with a combined weightage of 28% in the Nifty, can significantly influence market movement.

Notable Quotes

• "22,000 to 23,000 is the range for this month but the midpoint is 22500 so as long as it is trading above the midpoint you know like you can say uh we have a slightly positive bias"
• "Whatever the bad thing can happen so probably it has already happened you know so what can be worse than Trump fear right"

Conclusion

The pre-market report suggests a positive opening for the Nifty, driven by easing concerns about potential Trump tariff announcements and positive cues from Asian markets. The market is expected to consolidate within a range, with FII selling on up moves and DII buying on down moves. The speaker highlights the importance of the 22,500 level and suggests that the market is more likely to move upwards than downwards. Stock-specific movements, particularly in banking and Reliance Industries, will also influence market direction. The release of margin money for long-term option traders is also expected to provide additional liquidity.