Pre Market Report, August 05, 2020 | Stocks and Commodities

August 05, 2020

Time: 8 am

Pre Market Report:

1. US markets opened lower but closed higher.
2. Asian markets are mixed.
3. SGX Nifty is down by about 30 points.
4. Nifty has corrected nearly 450 points in the last few days.
5. That was about 50% of the last run.
6. So markets took support and reversed.
7. Both HDFC Bank and Reliance came under huge selling pressure in the last few days.
8. RBI approval for HDFC Bank new chairman, triggered the short covering in HDFC Bank.
9. Short covering started in HDFC Bank but Reliance was the star of short covering.
10. Reliance shot up more than 7% yesterday.
11. Now the question is, What next?
12. I mentioned yesterday that there will be some short covering before RBI policy on Thursday.
13. Since the short covering has already happened, markets may consolidate ahead of two key events, (i) RBI Policy on Thursday and (ii) US Unemployment data on Friday.
14. FIIs were net buyers for Rs 703 crores.
15. DIIs were net sellers for Rs 665 crores.
16. So FIIs have resumed their buying and that is a good news for bulls.
17. If RBI announces some restructuring of loans, then Bank Nifty will see another round of short covering.
18. So markets may see a decisive move only next week.
19. Until then it is consolidation and premium eating days.
20. I sold 10700PE and 11300CE both for about Rs 8.
21. Looking to pocket all the premiums by Thursday.
22. Until RBI policy, Bank Nifty may be volatile.
23. Reliance is close to all time high, so it may also consolidate for few days.
24. One more round of short covering will happen if 2200 is crossed.
25. Reliance 2200, 2300 CE have huge open interest. (May be because of me!)
26. PSU Banks are under performing.
27. Axis Bank will be in focus due to fund raising.
28. Kotak Bank has also under performed, if Bank Nifty picks up, Kotak Bank may be in focus.
29. Nifty will take support at 10980.
30. Resistance will be around 11180.