Pre Market Report, May 29, 2020 | Stocks and Commodities

May 29, 2020
Time: 8 am

Pre Market Report:

1. Yesterday once again short covering continued.
2. Fro day before yesterday low to yesterday high, Nifty was up by 500 points and Bank Nifty was up by 2300 points.
3. Earlier I mentioned that whenever markets are highly volatile, last few days of expiry week will see big moves.
4. Now the short covering rally is over, what next?
5. Now we are waking up to reality.
6. (i) US-China tension is increasing, Trump is likely to announce sanctions against China today evening. Dow fell nearly 400 points from intraday high.
7. (ii) Today evening we will get India's GDP data. This data is for Jan-March, remember Corona lock down happened in March only, so full impact of Corona will not be reflected in this figure. Next quarter data will reflect to full impact.
8. (iii) Corona virus problem is getting bad day by day in India. Chennai is seeing second highest cases in India where temperature is so high. Earlier we thought high temperature countries will be affected less.
9. (iv) Indo China border area is still seeing some problems. Many news papers are reporting it recently. That is actually not good for both the countries stock markets. (Anyway both the countries do not bother about stock markets.😃😃😃)
10. These are the headwinds for June series.
11. There are some positive news also.
12. Lock down may be lifted or at least eased. That is why Auto stocks shot up yesterday.
13. Monsoon is likely to be normal, expected to reach Kerala on June 1.
14. FIIs have turned net buyers for more than Rs 2000 crores yesterday after continuously selling in the entire May series, barring the block deals.
15. Huge under performance by banking stocks has been corrected.
16. The broader range for June series will be same as May series, 8800-10000.
17. One good thing in June series is that we will get margin benefit if we hedge our positions.
18. Margins will be lower for indices while it becomes more expensive for stocks.
19. SGX Nifty hit a low of 9306 but now recovered to trade above 9400.
20. Today markets will be jittery due to GDP data, Trump announcement, etc.
21. So we will take a view on Monday. I prefer not to take any new positions today.
22. Nifty June future was at 65 point discount and Bank Nifty June Future was at 200 point discount shows that yesterday's rally, especially last hour, was due to short covering.
23. Will be doing a series of videos about my Calls in May and how they performed.
24. Usually first trading session trend continues for 3 weeks.
25. Last expiry, first trading session was negative, for 3 weeks it continued to be weak.
26. Today we are starting weak, let us see what happens.
27. Today Nifty future may trade between 9350 and 9500.