Pre market analysis: 26 June 2020
Positives:
Yesterday global markets rebounded from previous day sell off
Economies continue to relax virus related restrictions further
Negatives:
Both FIIs & DIIs booked profit yesterday.
Virus is spreading faster and second wave is here.
Tense situation India China border is dragging on.
Global Markets: -Rebound
European and US markets re bounded and retraced some of the losses of previous day’s sell off. The developed markets are still in consolidation range near the swing top achieved on second week of June. Other asset classes, both risk assets and safe haven assets traded in sideways. Gold held on to its break out although it reversed slightly yesterday. Volatility index cooled off from previous day.
ASIAN Markets this morning: - Still Consolidating
Asian markets opened the day in green and are trading sideways since then. The consolidation range near swing top is still holding. SGX Nifty is trading flat comparted to Nifty’s yesterday close.
Calendar Events:
There are no major economic event / data release scheduled today
India: -Consolidation
Both FIIs and DIIs used to the pull back in Nifty to book profit yesterday. NSE turnover was almost flat comparted to previous day. The advance decline ratio was better at 1.06X.
How will Nifty perform today?
Nifty is reversing from the bull channel boundary line. Both FIIs and DIIs booking profit on pull backs after a day of sharp fall, probably signals that profit booking will happen for few more days. Global market mood is rebounding and markets are still in consolidation phase. Hence markets may not witness sharp down fall. I expect a sideways market with swing tops being used to book profit.
While most of the sectoral indices in NSE are mirroring Nifty, one exception is FMCG index, it continues to go up. Heavy weights ITC and Hindustan Unilever surged yesterday. The sub index is at the top of the ascending triangle ready for breakout.
Result announcement:
There are no heavy weights declaring results today.
NIFTY -Technical Bias:
Price Action & Pattern:
Nifty consolidated yesterday after sharp fall in the previous session. The profit booking is likely to keep the markets in a range. I expect markets to trade in a range of 10425 to 10180. Break out below 10180 could signal institutions are heavily selling that could take index further down.
Trade Ideas:
Bearish spreads are still appropriate today. However, entry is key. Pull backs could be used to go short.
Update:
Nifty was range bound and volatile.