Pre Market Report, October 27, 2020 | Stocks and Commodities

 October 27, 2020

Time: 8 am

Pre Market Report:

1. The week began with huge sell off.
2. In last two months, there were many such sell offs.
3. Last time, Nifty fell from 12025 to 11660.
4. Since then we have been trading between 11660 and 12025.
5. Yesterday Reliance fell 4% as Amazon won the arbitration case.
6. Two wheeler stocks fell due to Bajaj Auto comments.
7. HDFC Bank and ICICI Bank fell for no reason.
8. Metal stocks fell due to JSW Steel results.
9. IT was the only sector that was not in Red.
10. But later in the afternoon, when SAP fell 20% in Germany, IT stocks also started falling.
11. But the closing was not very bad, Nifty recovered about 60, 70 points from the low.
12. Bank Nifty recovered from the low due to Kotak Bank out performance.
13. During the weekend, Corona Virus surge, markets have factored in.
14. So what next? Will they continue to fall? Stabilise? or Will there be V shape recovery?
15. V shape recovery seems to be ruled out, so markets may consolidate.
16. First time in recent months, CBOE VIX crossed 30 and the volatility likely to continue until election results.
17. Even India VIX was up by 5% yesterday.
18. DIIs, as usual, were selling for about Rs 1000 crores.
19. What was missing, FII buying. That is the reason for drastic fall.
20. Right now SGX Nifty is trading around 11820.
21. South Korea turned positive.
22. Many Asian markets recovered from lows.
23. Last few times, whenever markets fell drastically, next day, it was gap up open and previous days low was not broken.
24. But this time, we are very close to long (5 week) expiry. Anything can happen.
25. I will be happy if Nifty trades between 11800 and 12000. (Yesterday sold lot of 12000, 12100, 12200CEs)
26. Clearly, yesterday, we have over reacted, so yesterday's low should be the low for this expiry.
27. But volatility may continue.
28. Reliance has to move at least Rs 80-100 for the markets to recover.
29. Last time Infosys announced lot of employee benefits, stock fell despite good results, now Reliance reversed the pay cut for employees, Reliance fell.
30. Nifty future may trade between 11720 and 11920.