Pre Market Report, May 08, 2020 | Stocks and Commodities

May 08, 2020
Time: 8.30 am

Pre Market Report:

1. US markets closed in Green.
2. Asian markets are higher.
3. SGX Nifty is trading around 9300.
4. Nifty has been in consolidation mode in this week.
5. But within this short range, markets are highly volatile.
6. Yesterday FIIs bought for Rs 19056 crores in Cash market.
7. DIIs have bought for Rs 3818 crores.
8. This is about 23K crore of Institutional buying.
9. But figures apparently looks very good but it is not.
10. GSK sold 25K crore worth of HUL shares.
11. GSK is not a FII, its investment comes under FDI.
12. So their sell figure is not captured under FII data.
13. But the buyers yesterday are all FIIs and DIIs.
14. So only the buy figures is reflected under this category.
15. So effectively FIIs and DIIs have sold shares worth Rs 2K crores yesterday.
16. FIIs in F&O seems to be bearish.
17. They have added short positions.
18. But they are extreme short term bets, shorts are good for two reasons.
19. If markets fall, these short sellers will be tempted to book profits, that will cushion the fall.
20. So markets may not fall significantly.
21. If markets move higher, these short sellers will be running to cover their positions and markets will move further higher due to short covering.
22. Yesterday markets fell, Nifty fell more than 70 points, still India VIX fell.
23. India VIX fell below 40.
24. Despite Nifty fell more than 70 points, Nifty 8000PE has given Rs 10 profit.
25. Nifty 10200CE also gave Rs 10 profit.
26. I sold both options earlier as I am expecting broader range of 8000-10000 for Nifty in May.
27. Reliance is keeping the index from collapsing.
28. Reliance has shot up from Rs 875 to Rs 1500, almost double in one month.
29. Second week of May is starting with some optimism.
30. But today evening US Payroll data is an important data to watch.
31. ICICI Bank will be in focus ahead of its results tomorrow.
32. Since markets are in consolidation mode, Nifty future is likely to trade between 9100 and 9400.
33. Breaking either of these levels will lead to expansion in that direction.
34. If 9100 is broken, Nifty can test 8800.
35. If 9400 is broken on the higher side, then we can expect Nifty to rally towards 9800-9900.
36. Today Nifty future may trade between 9200 and 9380.