Pre Market Report, January 4, 2016 | Stocks and Commodities

January 4, 2016
Time: 8.25 am

Pre Market Report:

1. US markets are closed higher in the first trading session of 2017.
2. So Asian markets are mostly higher marginally.
3. SGX Nifty is also trading slightly higher.
4. But FII selling continues and they have sold for Rs 500.49 crores yesterday.
5. So the trend reversal may not happen and markets may trade range bound for next two weeks until corporate rssults give some clarity on the effect of Demonetisation.
6. After 2008, this could be the longest period of FII selling in Cash market.
7. We need to see for one or two more days whether they sell aggressively like this or not.
8. If they continue to sell like this then Nifty will trade between 8000 and 8300.
9. Highest open interest among Puts is at 8000 and among Calls is at 8300.
10. The combined premium is about Rs 110 and hence the range for Nifty will be 7900 and 8400 in order for these option sellers to make money.
11. But not everything looks negative.
12. Though FIIs are selling in Cash market, they have turned net buyers in Index futures and Stock Futures.
13. There is huge activity in Options also. Usually when there is huge activity in optons, markets will make big moves.
14. DIIs buy figures are matching the FII sell figures.
15. Yesterday Bharti announcement of Free Data for one year for new customers dragged Reliance by Rs 10 in the last half an hour and that was the main reason for Nifty's fall in the last half an hour.
16. Otherwise Nifty would have closed above 8200 yesterday.
17. More and more Financial Institutions are cutting the interest rates and HDFC will be in focus today due to rate cut.
18. Nifty is facing stiff resistance at 8220, once that is crossed decissively, Nifty will move towrads 8280-8320 level.
19. That will turn the sentiment and markets will move higher due to short covering.
20. On November 15, markets fell and after that a number of times Nifty faced resistance at 8220. So that has to be crossed for Nifty to reach the 8300 level where it was closed on November 11.
21. Bank Nifty's corresponding price was 19800, so Bank Nifty has to out perform for Nifty to recover.
22. Yesterday first time after a long time, Bank Nifty has out performed.
23. So if that trend continues, we can hope for some recovery in Nifty.
24. Nifty future is likely to take support at 8180 today.
25. Resistance will be at 8260.