Premarket analysis: 13 August 2020
Global markets ended with solid gain again
Relentless buying from FIIs
Economic data is unsupportive of bull case
DIIs continue to sell
Global Markets: -Green again
European and US markets ended the day yesterday with solid gains again. Many of the equity indices in US and Europe have broken out of the range and are marching towards all time highs.
Risk assets: High yield bonds and local government bonds of emerging Asia fell again yesterday. Other risk assets such as emerging market equity ETFs and metal index ended in green.
Safe heaven assets: Dollar index retraced some of the pull back gains it made in the last week. Japanese Yen and Gold ended in red.
ASIA this morning: - In Green
Most of the Asian equity indices are in green. Indonesian, Korean and Taiwanese indices had already broken out of range and marching ahead. European and US equity futures are trading flat this morning in the Asian session. SGX Nifty is trading flat compared to yesterday futures close.
Consumer price inflation will be released today which is expected to raise to 6.15% Vs previous reading of 6.09%.
India: - Lagging behind
FIIs have been offering solid buying support this month. However relentless DIIs selling in cash market has put a cap on the rally. DIIs selling is probably to meet the mutual fund withdrawal from account holders.
In derivatives segment, FIIs have gone from net long position to net short position in index while they are still holding long position in stock derivatives. DIIs continue to hold short position in both index and stock derivative segment. largely reduced their long position and
How will Nifty perform today?
Asian and global markets are marching ahead as their economies are quickly recovering from COVID related lockdowns. However, Nifty looks exhausted, it could not move ahead two days after it broke 11300 levels. Hence Nifty if fails to make a sharp up move in next couple of days, bears will likely take over and mount an attack to push the index towards 11K.
NIFTY -Technical Bias:
Nifty Price action:
Nifty breakout from earlier swing top is not as strong as it was in its earlier occasions. The price action at around 11300 is to be watched for sharp moves on either direction.
Support: 11150 and then 11050
Resistance: 11350 and then 11450
Bank Nifty Price action:
Bank Nifty’s bounce from bottom of the range has not led to sharp move towards range top as it was in the earlier occasions. It seems to facing selling pressure at around 22300. Both BN and Nifty need to show strong upward bias in next couple of days else a bear case will build up.
Markets will additionally face expiry related volatility today. Hence traders need to watch out for trend exhaustion and possible pull back in both indices.