Pre Market Report, August 22, 2016 | Stocks and Commodities

August 22, 2016
Time: 8.30 am

Pre Market Report:

1. US markets closed lower on Friday.
2. Asian markets are mixed.
3. SGX Nifty is trading around 8680, almost flat compared to Friday's close.
4. In the last three weeks, markets did not go anywhere.
5. Last expiry, Nifty closed at 8666 and after three weeks on Friday also Nifty closed at 8666.
6. But markets can not trade flat for longer period of time.
7. Markets will have to move significantly higher or lower.
8. On Saturday Govt. announced Mr Urjit Patel as new RBI Governor.
9. Generl media report is that markets are likely to move higher after his appointment.
10. But Bank Nifty is already out performing, so we need to see how markets react to this news.
11. NTPC and HPCL will declare results today.
12. Auro Pharma may see action ahead of its results tomorrow.
13. Markets are expected to be volatile due to expiry related issues.
14. In this series alone FIIs have bought options worth about Rs 12,000 crores and and they will lose heavily if markets are not making any big moves in the next few days.
15. They are also short in stock futures worth about Rs 5800 crores which they may have to cover (or may roll over).
16. Markets have given confused signals this month.
17. So the expiry will be an interesting one.
18. Markets are pricing in not so good corporate results and FCNR(B) redemptions in September.
19. Any meaningful rally may come only in October.
20. Time to be careful with your short positions.
21. It is good that markets start without a big gap, so that stop loss can be maintained.
22. Nifty future should find resistance at 8750.
23. Once that is crossed, short covering will set in which may take Nifty to 8900 by the end of expiry.
24. Support should come around 8620.