Pre Market Report, July 20, 2016 | Stocks and Commodities

July 20, 2016
Time: 8.40 am

Pre Market Report:

1. Dow closed higher at all time high for 8 days in a row.
2. This is a record, after 1998.
3. After this kind of record in 1998, Dow was up by 60% in the next two years.
4. 60% in two years is a great return in US.
5. Despite such a huge run up after the Brexit, markets are just consolidating, not correcting.
6. Here, FIIs keep buying no matter how much DIIs are selling.
7. Even in F&O, FIIs keep adding huge long positions.
8. Highest open interest among Puts is at 8400 and Calls is at 8600.
9. So markets need some trigger to breach this band.
10. Just like in May Nifty was highly volatile between 7700 and 8000, in June Nifty was highly volatile between 8080 and 8300, now Nifty may be highly volatile between 8400 and 8600.
11. That is what we have been seeing in the last two days.
12. This high volatility simply tells you that markets are ready for a big move on either side once the band is broken.
13. But by looking at FII data, global cues, not so adverse news coming in GST front (though the bill is getting delayed), it looks like markets will break out.
14. Tomorrow HDFC Bank, ITC results may hold the key for the trigger.
15. Bank Nifty is still looking very strong after rising 1000 points in the last one week.
16. There is no incremental selling in IT pack.
17. So buy on dips strategy may work now.
18. But volatility will be there until GST issue is clear.
19. Nifty future may trade between 8420 and 8605.
20. Stock specific movements will be there in HDFC Bank, Kotak Bank, ITC ahead of their results.
21. Wipro will react to its Q1 results.
22. Pharma sector looks bullish after a long time.
23. As usual it will be Banks and Auto that will be leading from the front.