Pre Market Report, August 04, 2020 | Stocks and Commodities

August 04, 2020

Time: 8 am

Pre Market Report:

1. You can register at www.workshop.prsundar.com 
2. US markets closed higher.
3. Asian markets are higher.
4. SGX Nifty is up only about 30 points.
5. Reliance is down by about 10% in last few days.
6. HDFC Bank is down by about 10% in last few days.
7. Same is the case with ICICI Bank.
8. Nifty has also given up about 50% of its gains it made in the last leg of the rally.
9. So markets should consolidate here and start resuming its uptrend.
10. FIIs have created huge short positions.
11. Whenever there is huge short positions, markets may not fall much.
12. On the contrary, markets may see a short covering in the near future.
13. This is the first expiry, in my memory, ATM Put option had the highest Open Interest.
14. Nifty has fallen by about 4% in last few sessions. Yesterday Nifty fell about 200 points, 11000PE is ITM now, still 11000PE has the highest Open Interest.
15. On the contrary, last month, Nifty 11000CE had highest OI, even before Nifty touching 11000, this highest OI was shifted to 11500CE.
16. So by looking at all these, the down side is very limited.
17. I will be suggesting some Call ratio to my Paid Members of YouTube.
18. FIIs were net buyers for Rs 7818 crores in Cash market but we have to ignore this.
19. There was stake sale of Rs 10500 Crores in Bhandan Bank, we do not know how much of this was bought by FIIs.
20. DIIs have sold for a small amount of rs 135 crores.
21. Though large caps are down, mid caps and small caps are not down.
22. So this is a concentrated selling in Banking stocks and profit booking in Reliance.
23. Bank Nifty may see some short covering ahead of RBI policy on Thursday.
24. Or Option writers may want to eat all the premium until Thursday, so actual short covering may wait until Thursday.
25. Nifty has to cross 11K for sentiment to turn around.
26. Monsoon has been good.
27. Tractor sales has been good.
28. Once this Corona issue is over, Nifty may even cross all time high.
29. Manufacturing PMI data was not good.
30. Amit Shah was infected with Corona Virus.
31. That could be one reason why we hugely under performed yesterday.
32. Markets think, what will happen if PM gets Corona?
33. We all know Amit Shah is a close associate of PM.
34. Barzil president and UK PM got virus and markets reacted negatively in those countries.
35. But by knowing the life style of our PM, that probability is too low.
36. But market is market, irrational, fear and greed, that drives the market.
37. At the same time, no one should be complacent.
38. In fact I painted a good picture, said Corona will not affect India too much.
39. But opposite has happened.
40. Nifty should take support at yesterday's low of about 10880.
41. Resistance will come around 11050.