Premarket analysis: 15 July 2020
Global markets are attempting to breakout and continue uptrend
Risk assets are holding gains
DIIs & FIIs both booked profits with heavy volumes yesterday.
Raising virus infections.
Muted quarterly result expectations
Global Markets: -Attempting a breakout
US Dow jones ended with solid gains while Nasdaq ended sideways. European markets ended in red. Most of the developed markets are attempting to breakout of the consolidation range and continue with uptrend. High yield bonds and Emerging markets ETFs traded in US were positive. Copper prices and other industrial metals are consolidating gains. Gold is also consolidating after recent gains. US Dollar and Japanese Yen fell. USD index is at the bottom of the symmetrical triangle. VIX index in US cooled off.
ASIAN Markets this morning: - In Green
Asian markets are trading with decent gains this morning. Chinese Shanghai Index continues its consolidation. European and US futures are trading in green this morning in Asia session. SGX Nifty is trending down after opening above 10700 this morning. Currently it is trading about 80 points above Nifty futures’ close yesterday.
Wholesale price inflation came in at negative -1.81% against the expectation of -3.21%. Disinflation is not as bad as expected
India: -Profit booking
DIIs and FIIs booked profit heavily yesterday in spot market. Futures and options open interest on indices shows that DIIs, FIIS and large proprietary traders have increased their short position yesterday. Implied volatility increased and still skewed backwards. This probably points to further downside.
How will Nifty perform today?
Positive mood in Asian markets and SGX index opening higher this morning could help Nifty open gap up or flat this morning. However, institutions seem to be continuously booking profit and selling on any intraday pull backs. This could be due to muted quarterly results expected from heavy weights.
Infosys, Federal Bank and Bandhan bank will declare quarterly results today.
NIFTY -Technical Bias: Negative
Nifty price action:
Nifty was stuck in a tight range of 10650 -10850 for about a week. It broke down from that range yesterday thanks to institutions booking profit heavily. The negative bias is offset by risk on mood in Asian emerging market this morning. There fore Index likely to trade between 10450 to 10750
Spreads that work in a range bound markets are appropriate till index breaks below 10500/450