Pre Market Report, May 4, 2020 | Stocks and Commodities

May 4, 2020
Time: 8.15 am

Pre Market Report:

1. On Thursday markets shot up and hit series high.
2. Once our markets closed, US markets opened and traded llower.
3. US markets were down on Friday also.
4. Today morning also US futures are down.
5. Asian markets are also down.
6. Now the reality of Virus bites.
7. SGX Nifty hit a low of about 9200.
8. That is almost 700 points lower than Thursday high.
9. Due to the lock down for entire month of April, it natural that Auto companies declare zero sales.
10. I mentioned that Nifty will broadly trade between 7500 and 10000.
11. Now markets are reversing from the top end.
12. India extended lock down by another two weeks.
13. But partial opening is there, we need to see if this Partial Opening impact on new infections.
14. If new infections are in control, then Govt will be inclined to open the Economy in more areas.
15. If infections increase, then even the opened areas may come under lock down once again.
16. So that will add volatility i May series.
17. Usually May series is a weak series.
18. There is a saying in US, "Sell everything in May and go away"
19. So we are starting May series with more than 5% gap down, going by SGX Nifty.
20. Surprisingly Nifty is opening gap down by more than 5% the day after FIIs have bought Rs 1968 crores and DIIs bought Rs 579 in Cash market.
21. FIIs are holding long position in Index futures also, more than 60%.
22. But total OI is very less.
23. HUL and Reliance will be in focus.
24. Since HUL has performed extremely well, its not so good results will have some impact.
25. Reliance rights issue pricing is around 1250, so we need to see how markets react to this pricing and its results.
26. Technically speaking, just in matter of 2 trading sessions, Nifty broke the resistance level of 9300-9400 and touched 50% retracement level of 9900.
27. Now again falling back to 9300-9400 levels, if SGX Nifty is any indication.
28. So we can expect Nifty to go for consolidation a broad range.
29. The broad range will be 8800-10000.
30. If markets continue to trade lower for few more days, then Nifty 10000 can be considered as double top.
31. And that will become huge resistance for the entire series.
32. Last two weeks Nifty took support around 8800.
33. I think that will be defended in May series.