Premarket analysis: 06 July 2020
Positives:
Asian Indices are breaking out
Emerging market assets are in green
FIIs bot in cash market on Friday
Negatives:
Virus situation is getting out of control
Global Markets: -Positive
US markets ended in green on Friday and starting to break out of consolidation range. European markets ended either sideways or slightly negative. The emerging market equity EFT and currencies traded in US continued to raise. Other risk assets such as high yield bonds rose as well.
Gold and dollar index retreated from swing highs. Japanese yen is down this morning. Volatility index has been falling.
ASIAN Markets this morning: - Green
Asian markets started the week on positive note. Most of the markets are breaking out of the symmetrical triangle pattern. The indices are likely to re-test the recent tops or go up further. SGX Nifty is trading about 100 points above the Nifty futures’ close on Friday. Indian Rupee is trading in positive territory and holding its last week’s solid gain. European and US futures are trading in green as well in Asia session.
Calendar Events:
There are no important economic data scheduled for release today.
India: -Breakout holds
Positive global mood and excess liquidity pumped by the global central banks are again lifting the emerging market assets. This will help Nifty as well to further move up. Volumes in both Nifty 50 stocks and Nifty 500 stocks were lower on Friday. That could be attributed to low volume trades from DIIs and FIIs. However, FIIs were net buyers in the thin cash market after a week or so while DIIs booked profit. FIIs are not likely to turn sellers today.
How will Nifty perform today?
SGX Nifty and Asian markets indicate that Nifty is likely to open in positive territory and gap up above 10630.
Result announcement:
There no heavy weights declaring results today.
NIFTY -Technical Bias
Price Action & Technically important levels:
Nifty after break out of 10500 is continuing its up move towards 10720. A good support exists at 10200 while 10400 offers a decent support. If Nifty pulls back from current levels, price action at 10400 is to be watched for buying support.
Support: 10200 / 10400
Resistance: 10680/10720
Trade Ideas:
Continuation of bullish spreads are appropriate but entering the spread at higher levels may not be beneficial.
