Premarket analysis: 13 July 2020
Asian markets are positive
Emerging market rally continues
Risk assets are pushing upwards
DIIs & FIIs booked profit on Friday and last week.
Virus infections continue to hit all-time highs but markets are not paying attention
Global Markets: -Risk on mood is back
US and European markets gained more than 1.00% in green on Friday. High yield bonds, Emerging markets ETFs traded in US were flat or positive. Copper prices are shooting through the roof. Gold refused to budge from swing highs and is currently coiling sideways. US Dollar and Japanese Yen are subdued. VIX index is starting to move down after a brief pause.
ASIAN Markets this morning: - In Green
Asian markets are starting the week in green and most markets are attempting to break out of the consolidation range. Chinese Shanghai Index which had stellar run up so far this month paused and ended in red on Friday. It is rebounding today. SGX Nifty is trading about 75 points above Nifty futures' close yesterday.
CPI numbers are likely to be released this evening which is expected to come in at 5.3%. The CPI numbers were not released in previous weeks due to COVID-19.
India: -Will Bull market continue?
The previous week has seen quite a bit of profit booking by institutions while markets held on to its gains and coiled sideways. Both FIIs and DIIs booked profit on Friday as well on cash market. FIIs and large proprietary trader are holding net short position in open interest on Index derivative as of Friday. However, the positive mood prevailing in global and emerging markets should help Indian markets today.
How will Nifty perform today?
SGX Nifty indicates that Nifty is likely to open gap up today. However Nifty and Bank Nifty has been closing in green for four consecutive weeks. Therefore, I expect markets will likely to be range bound for this week as well. Higher levels may continue to see profit booking while pull back towards 10500 will likely to see buying support.
No heavy weights are scheduled to declare results today.
NIFTY -Technical Bias: Range expansion?
Nifty price action:
Nifty consolidated in a tight range between 10650 to 10850 during the previous week. Close above or below this levels may widen the range to 10450 to 11K. Both Nifty and Bank Nifty are firmly on uptrend. Global risk-on mood should help Nifty hold above 10450. However higher levels may continue to see profit booking.
Key Index levels are unchanged and range expansion is possible .
Resistance: 10850 /11000
Spreads that will make money within a range of 10500 to 11000 are appropriate