Pre Market Report, March 2, 2016 | Stocks and Commodities

March 2, 2016
Time: 8.15 am

Pre Market Report:

1. What a difference 10 hours of trading can do?
2. On Monday afternoon Nifty was close to 6800.
3. Only few hours of trading on Monday followed by by 6 hours 15 minutes of trade on Tuesday, and now Nifty is likely to open around 7340.
4. This is a nearly 500 point rally in just 10 hours of trading from Monday afternoon to Wednesday morning.
5. All technical people said 7250 is huge resistance. Many people would have gone short with a stop loss above 7250.
6. But today's gap up of over 100 points will make them to lose a lot.
7. SGX Nifty is trading around 7340.
8. Since last Tuesday, 23rd Feb, 2016, Nifty moved from 7250 to 6800 and then from 6800 to 7340 (assuming we open as per SGX indication) Nifty has moved nearly 1000 points and this is not taking into intraday moves.
9. Traders would have lost heavily.
10. But markets will have to stabilise after such a huge run up.
11. If markets move beyond 7400 or 7500 that is very dangerous.
12. If RBI rate cut does not happen in the next one or two days, then there will be huge selling by Friday afternoon.
13. So gradual move is always good, this kind of huge moves is actually not good.
14. Bank stocks likely to do well once again as RBI allowed revaluation of real estate assets of banks to be considered as capital.
15. Also Basel 3 norms are eased, so suddenly banks are doing very well and hence the Nifty.
16. Nifty is likely to gap up by about 100 points and I expect markets to consolidate.