Pre market analysis: 24 June 2020
Global markets ended in positive territory yesterday
Flash Purchasing Manager’s Index for major economies show sharp rebound for June
Both FIIs & DIIs bought in the cash market yesterday
India China decided to deescalate tension
Global markets are still cautious amid second wave of virus
Global Markets: -Consolidation continues
Both European and US markets ended with gains but indices are still within the consolidation range. Safe haven asset US Dollar is drifting lower that made Japanese yen and gold gain against USD. Emerging market currencies and High yield bonds were in sideways consolidation phase while Asia emerging market equity ETFs rose again yesterday. Volatility index is cooling off further.
ASIAN Markets this morning: - Consolidation
Most of the Asian markets opened the day with gains and started drifting lower. They are still trading in positive territory. SGX Nifty is trading flat at around 10450 levels after touching high of 10530.
There are no major regular economic data to be released today
India: Catching up with global market
Both DIIs and FIIs bot yesterday in the cash market but in smaller quantity. Overall volumes in both Nifty50 stocks and Nifty500 stocks were down for the second day. The advance decline ratio was very bullish. 1030 stocks advanced in NSE as against 377 stocks that declined. There are no signs of profit booking yet from DIIs or FIIs. Indian markets which lagged behind other developed markets in the recent rally is trying to catch up at last.
How will Nifty perform today?
Nifty has been up for fourth consecutive day yesterday. Institutional and retail support seems to be intact so far. At the moment, markets do not expect any more bad news for Indian economy hence likely to stay bullish. Banking stocks are doing particularly well. Bank Nifty has again broken out of range yesterday.
Canara Bank and Gail will be declaring results today.
NIFTY -Technical Bias:
Price Action & Pattern:
Nifty continued its upward journey after a day of “doji star” candle. This makes the doji part of continuation pattern and not a reversal sign. Nifty is close to the bull channel top while Bank nifty has broken out of range yesterday. Market are likely to trade with positive bias but be range bound between 10550 and 10280. Although its not wise to expect a tight range in the bullish market, my expectation is based on technical pattern. I expect Nifty take a breather at bull channel boundary line.
Those who are holding spreads that benefits from sideways market need to watch out for decisive break or close above 10500 and adjust the legs of the combination accordingly.